Starting a business doesn’t mean you have to or should launch a startup from scratch. Some of the biggest chains are run by independent owners. Here are seven reasons a franchise is a smart choice.
Many well-known franchises such as KFC, 7-Eleven, Ace Hardware, and Marriott are just a few that are run by independent operators, according to GoBankingRates. Other franchises that have a low entry point without holding you to a long-term commitment include Dunkin’, the UPS store, Popeye’s, Sonic Drive-In, Great Clips, Taco Bell, Sport Clips, and more, according to HubSpot.
When you invest in a franchise you are not starting from square one. You benefit from hard-on experience and trial-and-error knowledge already gained from other franchises that will show you what works and what doesn’t. You don’t have to repeat the same mistakes.
Multiple systems necessary for running the business are already in place such as management, marketing and advertising plans, bookkeeping, equipment, staff needs, training, and so on.
One of the hardest things with a new startup is branding the business and getting your name out there. Many franchises you can buy into are not only well-established, some are already household names. Further, many already have a customer base that is ready to start buying the minute you open your doors.
Independent franchise operators have the advantage of being able to have access to the powerful advertising and marketing created by the regional and national chains. These usually include extremely high-quality television commercials, radio ads, and social media advertising, as well as merchandising and live events. Some even include celebrity spokespeople. This would be hard to pull off as a fledgling startup.
As mentioned above, the company has already gone through most of the trial-and-error steps to figure out what’s needed, what works, and what doesn’t. As a franchise owner, not only are you spared all that, but the parent company will actually train you in everything you need to know to operate the business and provide the valuable insight to succeed.
It’s a sad fact of life that most businesses are doomed to fail. According to Forbes, here are the stats for every five startup businesses: 1 out of 5 fail in the first year. Half fail before 5 years. Only 1 in 3 will survive their first decade.
While it’s difficult to obtain reliable statistics for franchises, most experts agree franchises have a much higher long-term success rate and a lower failure rate. Additionally, when you operate a franchise, you have access to much more capital than an independent company simply by being associated with an established brand.