Franchising Opportunities
Franchising Opportunities Are Available Right Now
Franchising has often been described as a marriage or a partnership, a 'win-win' situation for both franchisor and franchisee - and it can be if both parties embark upon it in the right spirit. Franchising opportunities can deliver attractive benefits for both franchisees and franchisors.
- Reduced Risk of Failure: One of the advantages of a successful franchise is the reduced risk of failure for the franchisee, particularly when starting up a small business for the first time. Research indicates that approximately only 4% of new franchise outlets fail within the initial three-year period, compared with the 85% for other small businesses over the same period.
- Established Business Model: Franchising offers benefits to potential franchisees who have limited experience as the business has already been established and in most cases, services or products are standardised and uniform business names, trademarks, symbols, designs equipment and operating systems are used. This is a huge advantage, especially from the public viewpoint, because the franchise outlet is seen as part of a large chain of business. Also, the franchisor normally provides training and ongoing support in its business methods and provides assistance with site selection, premises design and layout, shop fits, business and managerial training, staff training, equipment selection, stock selection and business operation methods.
- Financial Benefits: When entering into a franchise arrangement, franchisees are normally informed of all start-up costs and on-going costs before entering into the agreement and these tend to be based on real-life experiences of other franchisees. Another financial advantage is the greater ease of obtaining financial assistance, particularly from banks who are more inclined to lend funds to established firms.
The Franchisor's Perspective
- Rapid Expansion: The franchisor benefits through rapid market penetration and expansion without the need for a massive capital outlay to establish and manage a complex organization. Franchising enables the franchisor to service national customers using their network of outlets while not being concerned with the day-to-day operations of each outlet
- Financial Benefits: The franchisor's expansion is largely paid by the franchisee as each outlet is opened by the franchisee using his/her own capital. Once established, the owners of the outlets represent a regular source of income to the parent company, since they generally pay it a percentage of gross revenues and often share advertising and promotion costs as well. In addition, the franchisees build the franchisor's goodwill. This allows the franchise as a whole network to have greater buying power and a larger budget for advertising.
- Increased Motivation: The franchisor's business is enhanced because of the franchisee's motivation stemming from his or her personal financial investment in the business. Research shows that franchised operators are 60% more likely to have more profitable businesses than employee managers. There is also a reduction in industrial aspects of running a business, such as strikes, workers compensation and payroll tax, as well as the cost advantages because there is no employment relationship between the franchisee and franchisor.
Community-Wide Benefits
The U.S. Department of Commerce claims that "franchising is perhaps the only form of business organisation that tends to create new business units providing new entrepreneurs, new jobs, new services, as well as new export opportunities". Communities also benefit from franchising opportunities through the efficient utilisation of small business which could otherwise result in the direct operation by larger businesses.
Thinking of exploring further franchising opportunities? Visit our site regularly for updates on real-life franchises for sale.