The pros and cons about buying a franchise

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The pros and cons about buying a franchise

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Before making any decision in life you should always consider the pros and cons of an idea. This is the same for buying into a franchise. In this article we will discuss the pros and cons of buying a franchise.

Pros

• Brand Name: With a more established franchise you are provided with market awareness and a brand name. This can save a lot of time and money with acquiring a customer base and allows you the time and freedom to run your business.

• Turnkey System: The benefit of a franchise system is that it is a proven system for running the business and gaining profits. So if your skills are weaker in operations or sales then a turnkey franchise could be ideal.

• Support: One of the biggest hurdles for a small business starting out is the lack of support to help. When you buy into a franchise, you can share your problems with like minded business people who can help you out and have probably run across the same problem before.

• Low Inventory Prices: Franchise groups have buying power so equipment, inventory and services will allow you to buy things cheaper. If you were an independent small business, you would have very little buying power and your costs would be much higher.

• Recruitment: Every good business needs good employees and having a established name will have more recruiting pull than an unknown start up business.

Cons

• Freedom: If you were running your own business, you would make every decision and the success of the business would lie in you hands. With a franchise, you are required to provide financial information and run the business to set standards and practices. This is good in the fact that you will hopefully be running it in a proven success manner, but you may feel restricted if you want to make changes.

• Royalty Payment: Most franchises will need to make royalty payments, in return they will get support and advertising. This may not be the case for every franchise though, so you should check each business out before making any decisions.

• High Start up costs: As you have to pay the franchisors a set franchise fee, you may find acquiring this amount of money hard in the beginning of your business life or you may feel it would be better spent elsewhere.

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