Franchise or Original Business...

By Pamela Gold

Times are tough. The economy and job market are harsh. -- Recent college graduates are working in stores and loyal, long-time employees are being laid off. Owning a business of one's own is becoming more and more appealing for people in all levels of their career. So how do you choose between starting an original business and buying a franchise?

During uncertain times, you want to be as sure as possible about the choices you make. Starting a business can be one of the biggest risks you will ever take. Coming up with a unique product or service and then designing a concept and developing a brand can be an overwhelming challenge, especially if you do not have business development experience. A franchise, on the other hand, can be relatively easy to open and run.

Why Franchise? It's Very Simple!

When you buy a franchise, you're buying the rights to a developed brand and a perfected system. You're buying the luxury of not re-inventing the wheel because products, systems, marketing, and branding has all been tested and proven for you.

It is ultimately the product or the service that sets a franchise apart and makes it a success. Successful franchises offer customers and franchisees an excellent, uniform product or service, which they can rely on and believe in. Franchises attract customers who want consistent quality, and they attract prospective franchisees who are passionate about the product and want to offer it to others.

You're Never Alone

Franchisors want their franchisees to succeed. As a franchisee, you are part of a network of other entrepreneurs who are all working for one goal: To continue the success of your brand. Franchisors offer their industry and business experience to you, and you will often receive results from national advertising and brand awareness campaigns. All of this support leads to an incredibly high success rate for franchisees.

So Many Advantages...

There are pros and cons to owning any type of business, but one must consider the many advantages of owning a franchise. Primarily, the basic advantages include:

Name Recognition: A well-known brand name will attract customers and keep them coming back. Brand names truly provide an edge over single-unit, start-up businesses.

• Minimized Risk: It has been proven that in comparison to original businesses, the success rate for franchises is considerably higher.
• Support: You will probably be provided with support throughout your franchising journey. From motivation to problem solving, your franchisor wants you to succeed and you will never be alone.
• Training: Most franchisors will provide you with complete training, from specific skills to run your business and produce a product, to business tips and marketing skills.
• Proven Systems: It’s a fact that most franchises are tried and tested business systems.
• Site Selection: You will, most likely, receive assistance when you select a site for your new business.
• Financing: You will probably either receive guidance on where to find financing to buy your new franchise, or the franchisor may have its own financing program.
• Advertising: You may pay an advertising fee, which is typically quite affordable and provides national exposure that is priceless to you and your fellow franchisees.
• Cost Saving Solutions: Many franchisors will pass savings onto their franchisees by purchasing necessary items and inventory in bulk, and developing relationships with vendors.

Franchising Is Not For Everyone

It is true that if you are the radically independent type, and prefer to color outside of the lines, franchising may not be the best choice for you. When determining whether a franchise is the best type of business for you, you should consider certain disadvantages/ rules that may apply:

• Franchise Fees: Franchise fees are a required part of owning a franchise. These fees vary from system to system but typically range from $20,000 to $35,000.
• Royalties: There is typically a monthly royalty fee which is based on a percent of your sales.
• Control: For some, loss of control may be an issue. Franchisees must operate under the rules and regulations that their franchisor sets.
• Required Purchases: You may be required to purchase supplies or inventory from a specific source. This keeps the product uniform and often saves the franchisee money, but can also be undesirable for some.
• Termination Clause: If rules are not followed, a franchise can be taken away from a franchisee and their franchise agreement can be terminated.

Who else might be better off starting their own business instead of buying a franchise? Those that have a business idea that they truly believe in, and feel will succeed. If you have a business idea that you cannot find in franchised form, you will not be happy with a franchise, even if it is partly what you had in mind for your business. You cannot alter franchises, their systems and practices, and the way they are run.

Franchising Snap-Shot

• In a Gallup Organization poll, over 90% of franchisees considered their business to be a success.
• Total gross sales from franchised businesses totaled over $1 trillion! That's about one half of allU.S. retail sales and services. (IFA)
• There are over 8 million workers employed in over 100 franchised industries in the U.S. (IFA)
• Two-thirds of franchisees polled by the Gallup Organization said they would not be as successful if they had started their business on their own.

Franchises offer everyone, from the seasoned entrepreneur to those that are completely new to the business world and their chosen industry, a simple system for success. Franchisees benefit from research and development, experienced support from professionals, and the fact that they won't be re-inventing the wheel. Additionally, most franchisees enjoy faster success than those that own independent businesses. A proven and successful business plan properly paces the start-up of a business. Franchisees almost always out-pace independent business owners. Franchises grow quicker, reach break-out sooner, and succeed more regularly than independents in the same industry.

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Franchises offer the entrepreneur an incredible opportunity to be successful, with the guidance and support of a proven system and corporate experience. Today more than ever, franchise ownership is an optimal way for entrepreneurs from various backgrounds to become their own boss. If you're ready to take control of your future, visit our franchise center and start searching for your ideal business opportunity today!