11 Franchising Tips for 2011...

Written on the 23 June 2011 by Jessica Ciniglio

1) Franchises have a higher likelihood of success than other business models-
Some studies show that franchises have a success rate of approximately 90% as compared to only about 15% for businesses that are started from the ground up. The exact accuracy of these statistics are constantly argued by those in the industry, however, it is only logical that a franchise will be more successful than a 'ground- up' business since there is already an established system in place that has worked well in the past and worked well for other franchisees.

2) The importance of a proven business model-
All Franchises have a business model in place designed for optimum productivity and sales. This means a business can be up and running immediately, and eliminates the lengthy time needed to develop the systems and processes, and as they are already in place (tried and tested) it also means you don't have to go through the normal challenges that often occur when setting them up for the first time.  

3) Franchisee's find it easier to get financing-
Lenders will often finance the purchase of a franchise more readily than a ground-up business because franchises already have a proven track record of success. Successful franchises are viewed as less of a risk to banks in regards to defaulting on repayments (and if banks consider franchises to be less risky shouldn't you?). Some Franchisors even offer vendor financing to the right franchisee!

4) Franchisors Provide Marketing & Support-
The great thing about owning a franchise is that your in business for yourself but not by yourself. The majority of franchisors offer a huge amount of support, not only with the set up of your franchise, but with all your marketing and ongoing technical needs as well.

5) Buying a Strong Brand-
As a franchisee you are essentially purchasing the right to use the trade name, logo and intellectual property of the franchisor. This can be your strongest marketing tool if you choose a franchise with a well known or well trusted brand.

6) Investigate your Territory-
Franchisors offer many types of territories so it is important to make sure that the type of territory being offered is condusive with the style of business you are entering. If you seek advice on this topic and match the right territory type with the right business it can prove to be very successful and will allow room for future growth.

7) Franchisee Comradeship-
One asspect of franchising that is not often spoken about is the comradeship between franchisees. This is a great benefit as franchisees can share ideas and offer support amoungst themselves without giving away sensitive information to any competitors to the brand. It becomes a powerful tool as franchisees 'share' the trials and errors, which means a reduction of costly mistakes for each individual franchisee.

8) Franchisors provide Real estate & Construction assistance-
The franchisor will select or help to select the perfect location/ piece of real estate for the franchisee which is a big help since the franchisor has experience with what works best for the franchise and often relationships with property managers. The franchisor will also help to construct an appropriate shop front and some fittings etc (often included in the franchise package).

9) Exploit Economies of scale-
Big savings can be made when working closely with the franchisor. This is done by pooling resources and getting the franchisor to 'buy in bulk' saving everyone 'a little bit here and a little bit there', which really adds up when you own a business!

10) As a Franchisee you are given a Training Program-
The training programs are one of the most important elements of a franchise package as it gives you the ability to use new technology, learn a new skill (if necessary), manage the financials and manage staff. The ability to do all of this at once is vital and is often the downfall of 'ground-up' businesses.

11) As a franchisee you have the flexibility to wake up in the morning and CHOOSE what to do that day!!!-
Being a franchisee gives you more freedom and flexibility so you can choose what you do with your days. This gives you a much better quality of life and all without the stress of starting a business from scratch!

-Jessica Ciniglio