Benefits of Franchising vs. Starting a New Business

Being an entrepreneur is fun because you’re starting something from the ground up and get to see what your two hands can make. However, there are so many things that can go wrong in a start-up venture catching even the most careful entrepreneur by surprise. This is a discouraging feeling and many entrepreneurs might balk at jumping into an opportunity because they’re worried about what may happen. However, this is where franchising is a great solution. Instead of worrying about things that can take out a start-up, a franchise opportunity offers entrepreneurs a chance to have the experience of being in a start-up environment with the support of a team that’s built businesses like this before.

Here are some of the biggest benefits of franchising versus having a start-up.

Marketing is No Longer a Concern

Obviously, with a franchise there are some basic marketing practices you have to engage in, but for the most part you aren’t building a marketing strategy to engage locals through SEO and other services. The hardest thing for a new business is getting skeptical customers through the doors, so money is plowed into marketing without knowing if the results bear fruit before the investment is made. Instead, the franchisor largely takes care of the marketing collateral, and your job as a franchisee is to execute the plan. With time and money redirected from building a marketing strategy, you can focus that on other areas of the business providing immediate profitability.

Securing Financing

Unless you have a large amount of liquid assets, it is often difficult to secure financing for a start-up. Franchises are easier for securing funding because there is a track record of success associated with the brand. Franchises have built-in business plans and everything else banks would need to evaluate credit worthiness and other financing considerations. In short, you can have less liquid assets and have a better chance of securing financing if you choose to go the route of franchising as opposed to starting up your own business.

Best Practices Already Sorted

With a start-up you have to establish the management practices, employee duties, scheduling protocol, and so much more. With a franchise, everything about the actual operation of the business is already taken care of, and all you need to do is implement the plan. Think about the difference – instead of spending time and manpower coming up with a plan and then losing money as you revise these plans, a franchise gets you from A to Z without needing to stop at each letter in between.

The bottom line is franchising saves entrepreneurs interested in building a business lots of time, manpower, and money thanks to the integrated support systems, so if you’re interested in building a business, create one that has already done the hard work for you.

What are some other benefits franchises have over start-ups? Let me know in the comments below!