The benefit of franchising is that the franchisee starts with a business model and established brand name. Protecting that name is up to all franchisees.
Franchising is the safety net that has fulfilled the “American Dream” of many. Today, this industry is bigger than ever and the career choice of even fresh college graduates. But before you buy a franchise, there’s something that you should know; and that’s the benefits and responsibilities of franchise ownership.
Benefits of a franchise business
- A business owner isn’t out there alone. The company whose franchise you purchase offers a host of support and training, or at least they should. A potential franchisee should ask plenty of questions about the level of support or training before buying.
- Anyone with basic business skills can buy a franchise, because at its core, franchising is following someone else’s path to success. In a stand alone business, the owner is on his own.
- There are franchises in virtually every field imaginable. Restaurants, direct marketing, coaching, real estate, repair and restoration and senior care are just a few that showcase the diversity of fields. It’s estimated that there are nearly 1 million franchise outlets in the U.S. In all, it’s estimated that there are 2,900 unique concepts and about 300 are added annually.
- The market is already built, in some cases, thanks to the well-known name of the franchisor. If the name is new to the area, the franchisor has plans, and in some cases marketing and advertising dollars, to help break through. So, there’s not the challenge of developing a brand name and building a business that comes with a stand-alone business.
Responsibilities of a franchise business
- Every great thing comes with some responsibilities. Franchisees have important obligations, most of which should be spelled out in the Franchise Disclosure Document.
- Make sure to fully understand the rules and guidelines in the franchise agreement.
- Franchisees who want to make small changes should consult the franchisor first. Some may be stringent about adding a new product line, for instance, while others will allow for the flexibility. Again, asking questions before signing the FDD is key here. For those already in a franchise agreement, though, ask questions before making changes is critical in maintaining a good relationship.
- Strictly enforce the quality and safety standards set by the franchisor who is protecting the brand name and marketing efforts for all of its franchisees. Remember, other franchisees will be held to the same standards, benefitting all.
A franchise works best when all parties involved know the benefits and responsibilities of franchise ownership. If all do their parts to adhere to what’s expected, all will benefit.