What Is It Like Owning a Franchise?
Are you hoping to be a business owner one day? Do you want to take charge of your financial future by becoming an entrepreneur, working for yourself and not for others?
There are many ways of making your entrepreneurial dreams come true. In the 21st century, starting a business is more accessible than at any other point in history.
But not all business paths are created equal. Many require long, difficult journeys to get from idea to startup to the first dollar in the bank. Owning a franchise, on the other hand, offers a very clear path forward. With a franchise, you are leveraging the assets of an existing business to take a lot of the guesswork out.
It’s the fast track to entrepreneurial success and should be a top consideration when you begin your own journey. Keep reading to learn what running a franchise is actually like.
Franchise Business Definition
A franchise is another branch of an existing business. It’s when you buy the right to use a particular business’s name, trademarks, branding, knowledge, and products.
Rather than having to build your own brand, developing your own product or service, you can use someone else’s. For example, you can become one of the 38,000 people who own a Mcdonald’s franchise worldwide.
When you do this, you pay for the right to sell McDonald’s products, using their systems and processes, their equipment, and their brand. This may be a much better option than starting a brand new burger joint with no reputation.
When you do this, you have zero customers. You have to build a brand reputation and a following from scratch. While it can work, it takes a long time.
With a franchise, on the other hand, you are leveraging the brand built by others, often over decades. When you start a franchise, you have customers from day one.
Owning a Franchise
Starting a franchise is a great option for first-time business owners. As a franchisee, you are going to get a ton of help. The franchisor won’t leave you on your own.
In fact, they’ve built out an entire program that will guide you to success as a franchise owner. The company wants you to be successful. The more successful you are, the more successful the franchisor is, too.
You get to use systems and processes developed by the original company. That means processes for hiring and managing staff. It also means processes and procedures for everything serving customers to cleaning, opening the shop to accounting, and pretty much anything else.
As a franchise owner, you have the freedom to manage the business as you see fit. However, you are in effect operating someone else’s business. You own it, but you have to play by their rules. You serve their products, wearing their uniforms.
A portion of your revenue goes back to the parent company. But it’s a small price to pay for the priceless education you receive and the quick profits you can expect to make.
Starting a Franchise
To start a franchise, you’re going to need some capital. Starting a new location can be quite expensive, though you may only need a portion of that yourself.
The parent company may cover half or more of the startup costs on your behalf. Generally, you can expect to need between 25% and 40% of the total startup cost as a down payment.
On top of that, you may need to take a franchisee course before you are approved to own and operate a franchise. This can take some time but is always worth the effort.
Is a Franchise Right for You?
Many people have dreams of owning their own company, under their own brand, serving customers in their own way. It’s an extremely rewarding path to take, but it’s one that is long and difficult.
Starting a business from scratch is much easier when you already have experience managing a business. As a result, it’s often best to start your entrepreneurial career by starting a franchise.
It’s kind of like business school, but instead of walking away with a degree at the end of it, you have a fully functional, cash-flowing business that you can keep or sell.
It’s an education that actually pays you, rather than the other way around. Plus, after successfully owning and operating a franchise, you will be in a much better position to start your own company one day.
You may have the cash needed to start your business without a loan. Or, since you have experience running a business, you’ll be more qualified to get a loan or investment in your new endeavors.
So whether you eventually sell your franchise to another aspiring entrepreneur, or keep it and pay a manager to handle the operations for you, owning a franchise is a good idea for most would-be business owners.
Best Franchises to Consider
The best thing about owning a franchise is that there are so many options available. When people hear about franchising, most people think about a restaurant franchise.
That’s just one example. If you like the idea of working in the restaurant business, franchises are a solid option. But there is so much more opportunity available.
There are retail stores like 7-11 or Ace Hardware. There are hotel franchise organizations like Marriott. There are real estate offices, accounting services, fitness centers, salons, carpet cleaning services, and many other franchise examples.
Many franchises will require a large number of startup funds, as you’ll need to buy or rent a building and outfit it with all of the equipment necessary to run a brick-and-mortar location. However, there are service-based franchises you could start for far less upfront.
With a service-based franchise, you would only need a vehicle and some basic equipment. That means you have a much lower loan and can start meaning a profit much sooner than with brick and mortar franchises.
Check out this article for more information on affordable franchises to consider. After all, the lower your startup costs, the sooner you can actually get started and start building the life you dream of.
Leverage the Success of Others
Owning a franchise is a smart move. It makes business ownership much more attainable, and it makes success much more likely. It allows you to leverage the success of others while you build an asset that you own.
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