Franchising has attracted some 34,000 people in the UK to invest in their future in self employment. Here are 15 reasons why franchises offer an attractive business opportunity.
1.Established brand value.
Prior to launching a franchise, the franchisor has developed and established attractive and meaningful branding for the operation, and as the network of franchisees expands the national recognition of this brand grows. When a franchisee enters into a mature franchisee network, they will benefit from the national name recognition the brand has built when it comes to their own marketing initiatives, while even new launch franchises have invested in professionally designed and intellectually protected branding to benefit its franchisees.
2.Accessing a proven system.
Most franchises are launched based on an initial head office or pilot operation that has been trading for at least one year. This is essential in enabling the franchisor to solve the teething problems any new business faces. The franchisee will benefit from lessons learned by the franchisor during this period through ongoing advice and support.
3.Offering a product or service in demand.
The pilot operation not only developed the operating systems and procedures of the business - importantly it also established a proven demand for the product or service.
4.A low risk route into self employment.
Franchising has traditionally a lower associated risk than starting up your own business independently. The proven nature of the business concept, combined with the training and support provided by the franchisor, lead to a lower level of failure. The 2007 NatWest/British Franchise Association UK Franchise Survey reveals that 93 per cent of franchisees reported profitability last year.
5.Professional initial training.
All business format franchises provides comprehensive initial training to prepare the franchisee for launching and the ongoing operation of the business. The franchisee can enter into self-employment confident that they are well prepared to tackle the challenge ahead.
6.Established profit margins.
Setting price levels to balance between competitiveness and profitability is a complicated process, often involving some trial and error that can prolong the development period of the franchisees business before break even. The franchisor will be able to help franchisees set the right pricing levels from day one to ensure they are not under or over quoting, maximising the profits their business generates.
7.Recommended suppliers or direct supply.
The franchisor will be able to offer assistance in sourcing the products and services that franchisees will require to operate their business, and in some cases will even act as the franchisees main supplier.
Whether the franchisees initial training is one week or two months, they won't be expected to absorb everything immediately. Many franchisors stagger their initial training to help franchisees learn while they are 'on-the-job'. This commitment to ongoing training also enables established franchisees to benefit from improvements in the franchisor's training provision, and eases the introduction of new products or services to the business.
Having the back up of a larger company is one of the main reasons cited by franchisees for the success of their business. Rather than searching for solutions on their own every time a difficulty arises, having a head office team to consult on the end of the phone will provide great reassurance.
10.Support from other franchisees.
Franchisees benefit from the success of their fellow franchisees, either indirectly by the improved reputation of the brand or directly through referral business in their own areas. They are therefore incentivised to assist each other and there is often a good level of communication across a network. Franchisors often encourage this by hosting quarterly...