All Posts in Category: Franchising
Many nascent business owners are unaware of the basic differences between starting an independent company and buying into a franchise. Each option has its own unique benefits, and any potential business owner must weight the pros and cons in accordance with their own situation to determine which model is the better fit.
For people who dream of taking an original idea and using to define and build a brand from the ground up, starting an independent company is the ultimate dream. When you open your own independent business you have complete control over every aspect of brand development, from the most fundamental design components to minute details. Having this freedom, of course, means that you will have to start from scratch and work hard to create your brand image, continuously monitor its evolution, and spread awareness through effective marketing.
By opening a franchise business you sacrifice a great deal of control over the various elements of the brand design and management. But what you lack in control, you make up for with an established brand presence and a powerful marketing arm already in place. Many franchises that you can partner with have a recognizable brand identity that has been honed over decades, as well as built-in customer bases that will automatically anticipate your opening.
Developing systems and processes
As an independent business owner, you will be responsible for creating all of the systems and processes that are necessary to get your product from an idea in your head to an object (service, software solution, etc.) in your customers’ hands. You can, of course, research helpful sources and take cues form established companies, but no process will work exactly the same in every situation, and you will have to constantly work to optimize your business systems to maximize results.
When you own a franchise, one of the most significant benefits which you gain access to is a series of processes that have been tested and improved over time. This includes systems such as supply chain management, inventory controls, product manufacturing specifications, and so much more.
Hiring and training protocols
If you hope to one day grow your independent business, you’re eventually going to have to hire some employees. Your employees will grow to be the heart and soul of your company, but the process isn’t without its pitfalls. Budgeting for salaries with uncertain growth plans is a complex issue. Additionally, if your training procedures or materials are insufficient, there isn’t much that your team members can do to overcome that.
Franchise brands, on the other hand, have recommended guidelines for hiring and staffing procedures, including number of employees needed at each position (based on size and operational output), wage structure (dependent upon local wage laws), and handling human resources issues. The franchisor will also provide you with training manuals that are standardized for your company’s specific operations.
For an owner of an independent business, the different financial scenarios that can occur run the gamut from simple to life-altering. It’s possible you’ll only need to invest a small amount of your own money before you start to make it up in revenue. It’s also possible that getting your company off the ground will require any combination of draining your personal savings, taking on additional debt, securing investments from outside sources, and more. It’s unpredictable, and every scenario is on the table.
Franchise business, meanwhile offer much more predictable financial investments on the part of owners. The requirements will differ from business to business, but going into the agreement you’ll have an understanding of exactly what is expected in terms of franchise fees and operational costs, and therefore you can budget more effectively.
If you’re considering a franchise investment or just have questions, feel free to contact one of our franchise specialists to learn more about the process and all the different franchise opportunities by completing our request form or calling 1-877-650-5551.