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A franchise is more profitable than starting a new enterprise

By unknown | Jul 19, 2007 | COMMENTS [ 0 ]

Buying a franchise is often a more convenient way of acquiring a business than starting your own from scratch.

Buying a franchise is often a more convenient way of acquiring a business than starting your own from scratch.

Few franchised businesses fail, which improves your chances of success compared with a venture you start yourself.

They offer you a successful business idea with proven marketing, operational support and an established identity. You also benefit from an established customer base.

Mistakes are less likely because the franchisor has experience in the business and can help you avoid the ones you would probably make alone.

The franchisor has experience with financial requirements, marketing, competition, supply contracts and other knowledge that might otherwise take you years to collect. You also don't need experience in the industry because the franchisor usually provides training.

Consider King Pie franchisees:

They come from all walks of life and do not even need baking experience since the franchisor will train them in the skills they require. Regardless of past experience, anyone who meets the criteria can buy a King Pie franchise.

"A strong operations and technical team guides the new franchisee through all the stages - from the site selection to marketing; from training to technical support, and a team is on hand on opening day," say Michael Cant and Ricardo Machado, the editors of Marketing Success Stories.

Help and guidance are readily available from the franchisor and from franchise bodies such as the Franchise Association of Southern Africa.

Good quality control by the franchisor contributes to greater customer satisfaction.

The franchisor will continue to research and develop new products, and enhance the existing line.

Research by National Westminster Bank and the British Franchise Association shows that about 90percent of franchises succeed, but about 60percent of non-franchised start-up businesses fail in their first year.

Banks are more willing to grant loans to franchised businesses because they are based on tried and proven ideas - not on something new.

The banks also know which franchises are successful and which ones are not.

If you decide to buy a franchise, remember that you are getting into a partnership with the franchisor, so it is important to check his background and the performance of his business before you decide to sign anything.


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