The franchising business model has been around for centuries, with some of the first examples dating back to medieval times. Today, franchising is a popular way to expand a business, with thousands of franchise locations operating across the globe. But before you purchase a franchise location, it’s important to weigh up the pros and cons to see if it’s the right decision for you.

Weighing up Your Options

Since a franchise is a joint venture between the franchisor and a franchisee, it’s important to consider who you will be getting into business with if you sign on with a specific franchise. When you’re considering franchising, there are a few key factors you need to take into account as part of your research:

• The franchisor’s reputation: Do your research on the franchisor and make sure they have a good reputation. Talk to other franchisees and see if they’re happy with the franchisor and the support they’ve received.
• The franchisor’s business model: Make sure you understand the franchisor’s business model and how it will work in your location.
• The franchisor’s fees: Franchisors typically charge an upfront fee, as well as ongoing royalties. Make sure you understand all the fees involved and whether you can afford them.
• The franchisor’s restrictions: Franchisors typically impose restrictions on how you operate the business, such as what products you can sell and what prices you can charge. Make sure you’re comfortable with these restrictions before you commit to franchising.

Advantages of a Franchise

When you franchise a business, you’re buying into a tried and true business model that’s been tested and proven by someone else. This can be a big advantage, as you don’t have to spend time and money developing your own business model.

Provided Training and Business Support

Almost all franchisors offer extensive training and support to their new franchisees. This can include help with marketing, accounting, and legal issues. For example, Mary Brown’s provides a three-week training course to teach new franchisees how to produce and serve the perfect product. With one-on-one seminars and classroom-style courses, you will leave your training feeling confident running the brand’s business systems.  

At the same time, franchise businesses can also offer financial support. There are franchise-specific loan programs whereby the franchise partners with banks and third-party lenders to provide special deals for the franchisee to ensure they have the funds to begin operations. 

Many franchisors also have a large network of other franchisees that you can tap into for advice and support. This can be a great resource when you’re starting out and need help getting your business off the ground. Such support can be a big help when you’re first getting started and can make it easier to run your franchise successfully.

Leverage Existing Brand Recognition

Another advantage of franchising is that you benefit from the existing brand recognition of the franchisor. This can make it easier to attract customers and get them through the door. Generally, when a new business opens up, the neighbourhood and residential markets have to come to know and trust the business before they place loyalty in it. 

However, with a well-known franchise, this is not the case. No need to waste money, time, and effort trying to get your target market to know and remember your brand- they already do! As a result, you can leverage this brand recognition from the outset, getting customers through the door as soon as you open. 

Receive a Turnkey Business

Further franchise advantages include receiving a fully set up business. Franchisors like Mary Brown’s provide real estate specialists and construction teams to choose and build the perfect branch location. You may have a hand in the preliminary groundwork and setup, but for the most part, the franchisor helps take care of this.

This means that a turnkey business offers potential owners a quicker route to market as well as minimized risk. Particularly when starting up a new business, the peace of mind that comes with not having to worry about certain components and instead, being able to focus on sales and growth is incredibly valuable.

Further, as a franchisee, you are given access to the franchisor’s infrastructure and internal processes and systems which have been tried and tested in the past. At the same time, there is already an established supply chain, so you won’t have to shop around for trustworthy vendors. This can offer a great foundation on which to build and grow your franchise location. 

Minimized Business Risk

Since a franchise is fundamentally about opening new branches under new management, the business will already have a solid business model and plan set in place for new franchisees to follow. With the above benefits, such as business and financial support, provided training, existing brand recognition, and a setup operation, there is overall less business risk involved. 

Overall, the value of franchising is immense, and it allows individuals to take part in a business bigger than themselves. On the whole, these advantages are key factors in why franchising is becoming an increasingly popular choice for entrepreneurs – it allows them to hit the ground running with a minimally risky and time-consuming venture. 

Disadvantages of Franchising

Despite the many advantages of franchising, there are also some disadvantages that you need to be aware of. Like any business decision, there are also risks associated with franchising. Therefore, keep in mind these disadvantages of franchising when making your decision. 

The Cost Can Be Comparable to a New Startup

One of the biggest disadvantages to buying a franchise is that you could end up spending as much money on a franchise as you would starting your own business from scratch. The buy-in for franchise locations is generally hundreds of thousands of dollars. At the same time, you have to continue to provide funds for marketing fees and pay ongoing royalties to the brand. 

Lack of Freedom and Independent Decision Making

Buying into a franchise means you must adhere to the franchisor’s rules and processes. This can be constraining and lead to frustration on the part of the franchisee if they feel that the franchisor is too restrictive in how they operate.

It is important to remember that as a franchisee, you are essentially working for someone else. This can lead to a lack of control and independence, which may not be ideal for everyone. If you like to have total control over all aspects of a business and the decisions that go along with that then franchising might not be right for you.

Possible Loss if the Franchise Goes Out of Business

Finally, franchising can be risky. Maybe not as risky as starting your own business from scratch, but if the franchisor goes out of business or decides to discontinue the franchise, you could lose everything you’ve invested in the business. That being said, if the brand’s business model is strong, and its brand recognition is huge, then this risk is minimized. 

So, Is Franchising Right For You? 

The answer depends on a number of factors, including your business goals, budget, and risk aversion. But before you make any decisions, it’s important to do your research and weigh up the pros and cons of franchising in order to make an informed choice. That being said, why not inquire about the latest Mary Brown’s franchise opportunities available to help you with that choice! 

Contact our team of franchise professionals to find out more today.