You’ve built up a little bit of capital. You’ve started some side businesses online. But you’re not exactly ready for the startup scene.
Too bad there isn’t something middle ground between a startup and a side-business, you think.
POOF! An ancient oil lamp appears in your hand. You rub it absentmindedly. POOF! A Djini appears before you and explains the rules about wishes and such.
You wish for a middle ground between a startup and a side-business. He says, “Dude. You’d be wasting your wish. There is already a middle ground and it’s called the franchise.”
You’re astounded. Then you open up your browser and find this blog article.
Keep scrolling to find out why a franchise business is a great option for beginner entrepreneurs.
1. No Research Necessary
My small town finally got a specialty running store this last year. And I’m worried it won’t last. Why? I suspect the owner didn’t do research on the area before opening shop.
My town is a tourist town that relies on wine tasters from Seattle. If you want a small retail business to succeed here, you need to have a storefront downtown. The owner of the running store built his business in the next town over and he’s suffering.
If you’re going to open a new business, whether in the “real” world or online, you need to research your market. If you don’t, you’ll end up like my friend the running store owner.
But opening a franchise won’t require this kind of research. Why? Because a good franchiser has done their research already and are willing to open a space in your town or in your market area.
You’ll have economics of scale behind your business. Better lease terms, locations, supplies, marketing services, etc.
2. Other Pros of Opening a Franchise
Let’s say you live in Minnesota and you come across a mosquito control franchise opportunity. How much risk is there in opening a mosquito control business in Minnesota? Already very little.
But if you open a franchise, you’ll already know by the success of other franchise locations how likely it is you’re going to succeed.
Buying a franchise could double your chances of surviving as a business.
A franchise already has a brand and trademark customers recognize. If you’re opening a McDonald’s franchise location, everyone already knows that name. If you’re opening “Shane’s Burgers,” you’ve got to fight to be known.
Established training for employees keeps your cost down. You won’t have to design or outsource for employee training.
You’ll be more likely to expand if you own a franchise. If there is a market for it, you could end up owning two or three locations in your city.
3. Cons of Opening a Franchise
If you’re hoping to be an independent business owner, don’t buy a franchise. This is not something you’ll be in full control of. And this bigger the franchise, the less control you’ll have over the direction of the business.
You’re bound to run the business for a specific amount of time. If you want out, well then, sorry, you’re stuck.
If the franchiser does something to jeopardize your business, you can’t do much about it. You’ll have to toe the party line and try to make whatever happened look good to your customers. And remember to duck if you see something red and spotty flying at your head.