As an owner of nine franchise businesses, I have personally
experienced the benefits as well as the limitations of opening
and running franchise businesses. The following is a list of
pros and cons of owning a major franchise business.
1. Pre-existing building layouts and décor requirements
lesson start-up confusion and facilitate quicker and easier
start-ups.
Many pre-existing franchisors The Franchise Giver Big Daddy
usually equip their new franchisees You The Little Fish with
possible layout and decor drawings and requirement spec sheets,
thus taking the guesswork and hassle out of trying to figure out
how you are going to build-out and equip your new business.
2. Franchise agreements and structures set up to save you
money on business, service or food products.
Because of the greater number of franchises, Big Daddy
usually has arranged cheaper national contracts wherein you can
get certain services, business or food products at a
significantly reduced price. You get to save money.
3. National Advertising included.
Well known, established franchises typically have a National
Advertising campaign in place that provides TV, radio, and
printed material advertising. This way, you don t have to spend
a lot of your own money locally advertising your business.
4. Name recognition.
Who has not heard of Baskin Robbins, Subway or GNC? If you
haven't, you've been living in a cave. Franchises typically have
wonderful name recognition benefits to them. In other words,
people will actively seek out a particular franchise wherever
they go.
5. Potential for higher sales.
With the national advertising campaigns and name recognition,
your franchise business has a better potential for much higher
sales than a similar business with a no-name, no experience
rating history.
6. Loss of creative control over business layout and décor
appearance.
The benefit of being told where and how to build and place
everything comes with loss of freedom you may want to express
your creative decorative expression in your business. If you
want to decorate your business with freedom, research the
franchise décor rules and regulations before you purchase a
franchise.
7. The products and/or services you provide are regulated
and controlled by Big Daddy .
These cheaper prices are usually accompanied with regulation
and control by the franchisor as to what type of products and
services you can or cannot purchase. In other words, Big Daddy
tells you what you can or cannot buy and from whom.
8. Loss of promotion/advertising freedom.
Great national advertising promotions are typically
accompanied by blanket: You will promote this product or service
during this campaign ruling. Hopefully, their advertising
campaigns will make sense, won t cost you too much money, and
bring in more business. Sometimes it works and sometimes it
doesn't.
9. Customer holds other franchise experiences against YOU.
If a customer has had a bad experience at one franchise
location, he tends to hold all of the other franchise owners
responsible for that one bad experience somewhere else. In other
words, I ll never go to another Subway because I didn't like the
meatball sub I got at Joe Blow s location.
10. Handing over a percentage of your sales to Big Daddy .
Yeah, higher sales! But ouch, you have to hand a large bulk
of your sales over to Big Daddy . For every dollar you earn,
your franchise fee rips away anywhere from .04˘ to .25˘. Pull
your wallet out and hand it over to Big Daddy .
As with any situation in life, there are resulting pros and
cons. Simply study the nature of the franchises completely and
talk to other franchise owners to get a feel of whether you will
want to purchase that particular franchise. If it s a good fit,
go for it!
Good luck and good business!
About the Author:
As a Mind Power Leadership coach, trainer, and speaker, Ronya
Banks has been teaching others how to become leaders and
business owners since 1992. Frequently featured in radio,
magazine and newspaper articles and interviews, Ronya helps
people find the great leaders within by accessing the natural
power of their minds. Discover more of Ronya s proven leadership
success secrets at: www.livinginaction.com or subscribe to her
Mind Power Leadership ezine newsletter at:
http://www.livinginaction.com/newsletter.cfm.
