If you’re looking to take your career to new heights and become your own boss, chances are the idea of buying a franchise has crossed your mind. Franchising is an excellent way to own your business, while also having the security of a tried and tested business model behind you. However, the decision to buy a franchise is not one to be taken lightly.
Buying and owning a franchise has plenty of incredible rewards, but it also has its cons. If you’re considering buying a franchise, it’s important you do your research and understand both the pros and cons of buying a franchise. The bottom line is franchising is not for everyone, but for the right individual, it can take your career to places you never thought possible.
So if you’re considering buying a franchise, here are some pros and cons to help you make your decision.
Perhaps one of the most enticing aspects of buying a franchise is that there are already business systems in place for you to use as you grow your franchise. Most franchises have in place computer systems, systems for marketing, operations and more.
When starting a business from scratch, these are the kinds of systems that will take you years to get up and running, but when you buy a franchise, they are already available to use from the get-go, meaning you’ll be turning a profit sooner.
At the beginning of your franchising career, you’ll receive initial training to get your franchise up and running as quickly as possible. Some franchises offer initial training, and allow franchisees to figure things out for themselves after that.
However, some franchises offer extensive ongoing training to really allow their franchisees to thrive and grow their skills. Before you buy a franchise, be sure to ask the franchisor what kind of training they offer.
Following on from the above point, when you buy a franchise, you’ll receive marketing and advertising templates that have been tried, tested and proven to work. Having these templates ready to go can help you get your name out there and securing clients quickly.
Most franchisors have great support systems in place for their franchisees. From office staff and admin, to your own personal mentor like ActionCOACH franchisees receive, the support you receive can make all the difference in whether your business succeeds or not. When shopping around for a franchise to buy, be sure to ask the franchisor about the type of support they offer their franchisees.
When buying a franchise, you’ll usually receive access to a whole network of other franchisees who you can reach out to if need be. These franchisees, especially if they’ve been running their franchise for a while, can offer you a wealth of information.
They are the ones who have likely already experienced the challenges you’re about to experience and can provide you with tips, tricks and advice to really help you find your feet and get your business off the ground.
When buying a franchise, you’ll be required to pay an up-front purchasing fee. While this is a one-time investment, it can be substantial. Essentially, it’s a licensing fee, which allows you to legally use the franchisor’s name and methods of operation. Before you invest in a franchise, you need to ensure you have the initial capital and enough to get you through the months where you’ll be setting up your business.
As a franchisee, you will need to pay the franchisor monthly royalty fees. Depending on the franchise, this may be a fixed amount, or a percentage of your gross sales each month. It’s important to check with the franchisor what the royalty fees are, and whether they are fixed or vary based on your earnings.
Franchisees are required to follow the rules of the franchisor. And, generally speaking, you don’t receive much wiggle room. In order for a franchise system to be effective, they need to have rules. However, these rules are there to keep things uniform across the brand, and are not a means of restricting you.
So while rules are important for franchises to be effective, not all entrepreneurs like to be restricted by rules, so this is something you need to consider before buying a franchise.
Depending on the franchise you invest in, you may be required to purchase your products and supplies from your franchisor. These will be set prices that all franchisees need to pay, and it’s generally the case that you will not be able to purchase potentially cheaper supplies from non-franchisor suppliers.
If you decide to sell your franchise, you cannot sell it to just anyone. The franchisor will usually need to approve the buyer, which can sometimes drag things out for you, especially if you want to sell your franchise quickly.
Interested in buying a franchise? Click here to find out more about ActionCOACH Franchise opportunity, which talks about everything you’ve ever wanted to know about buying a business coaching franchise.