As with most things in life there are pros and cons to the franchise model. Those that think it’s a great idea will talk about how you can buy a ‘ready made business’, benefit from the support the franchise company offers, trade on an established name, and often with only a modest capital investment.
On the other hand, franchise model detractors might counter these pros with “you have to run your business in the way the franchise company wants” or “you’re tied to selling their products or services, you can’t innovate”, or “you have to pay the franchise company royalties for all your hard work.”
All these statements are true of course, some franchisors may offer more flexibility than others but essentially you’re buying into a business – not buying a business outright.
So if you’re wondering whether buying a franchise is a good idea or not, the answer is “it depends.” Sorry. It depends on you and it depends on the franchise opportunity in question, but there are some very compelling reasons to invest in a franchise rather starting up your business from scratch.
How Franchises Give You The Skills To Run A Business
Running a business, becoming a business owner, requires a very varied skills set. In most established SMEs those skills will be performed by any number of employees. But for the start up business owner, the one-person band, you need to master them all.
Since I’ve been running Your Business Hub I’ve met a lot of sole traders, both people who’ve started their own business from scratch or bought a franchise. Many share the same challenges – crucially lack of time and money. They need to do lots of different activities to make their business a success, but to do these they either need to pay someone else to do it for them or find the time to do it themselves, and also have capital available to purchase the things that will help them grow.
The difference between the ‘own’ business owners and the franchise owners is that many of the franchisees have access to support and resources the others have to pay for. They may get free marketing packs that enable them to promote their services without scrapping around for cash. They may have systems in place that manage transactions, bookkeeping, stock control, payroll etc. without having to learn how to create these or outsource them to a provider.
And perhaps most importantly they get a ready-made successful business model that means they don’t have to constantly reinvent the wheel, or learn by trial and error. Of course there are good and bad franchise opportunities and so just buying a franchise isn’t a guarantee of success. But if you do your research, and you also commit to using the resources available and following the franchisor’s advice, in many cases it’s a lower risk than starting a business by yourself.
You may also like to read this post on buying a franchise – 7 Questions To Ask Before Taking On A Franchise.
I set up Your Business Hub to help business owners access many of the skills and resources franchise owners get as part and parcel of their business. So it is perhaps ironic that Your Business Hub is also a franchise company in itself!
Collaboration is a key value for Your Business Hub and this is exemplified in the franchise model. Franchise owners are part of a wider team benefiting from each other’s success and expertise, the collective power of being part of a larger business, and all the support and training that good franchise companies provide.
We’ve created this collaborative environment for local business owners (franchisees included) at our Hubs. So if this is something you like the sound of and you’re looking for a franchise business that helps other businesses succeed, perhaps you should set up a Hub in your town!