Why Franchising?

Crunch Fitness

Whether you own a McDonald’s or a lesser-known franchise brand such as TeamLogic IT or The Little Gym, franchising is a unique business endeavor. You are a business owner, but expected to follow the franchisor’s proven business model. You are responsible for your own success, but supported by your fellow franchisees and franchisor.

I personally insisted on choosing a franchise operation because of the support system it offered.

“My husband and I were looking for an opportunity to start our own venture. We considered mortgages, car washes, etc. I personally insisted on choosing a franchise operation because of the support system it offered. I felt that there was no point in us trying to recreate the wheel of success that had already been laid out for us. We just needed to pick it up, make it our own, and do the work,” says Crystal Gipson, who owns a Minuteman Press franchise in Georgetown, TX with her husband Ty. The Gipsons opened their location in 2006 and report they had $2.5 million in 2016 gross revenue.

You may well be wondering if you should start a business from scratch or invest in a franchise. According to the International Franchise Association, there are 780,000 franchise establishments that produce $890 billion of economic output for the U.S. economy, which makes one thing clear – franchising is a path many people take. Let’s take a look at some of the reasons why.

Reduced Risk
When you buy a franchise, you’re not only buying an established brand name, you’re buying into a proven concept and business model. You’ll be able to follow the company’s roadmap in bringing your business to market, and tap into an established brand and customer base.

Pre-Opening and Ongoing Support
The franchisor provides you with pre-opening support including training in how to set up and operate the business. Typically, you’ll also be assisted with site selection and your grand opening depending on the type of franchise you purchase. You’ll continue to be supported by your franchisor through ongoing training, marketing, R&D, purchasing and more as long as you are a franchisee.

The franchise model allowed me to choose the business I wanted without any experience in the industry.

“I was actually forced to open my own business. I was a Purchasing Manager in a corporate environment, but due to consolidation I would have had to relocate, which my family and I did not want to do,” says Milton Chancellor, who opened his FASTSIGNS of Tuscaloosa, AL franchise in October 2014 with his wife, Gina. “I looked at the available jobs and other business opportunities. The franchise model allowed me to choose the business I wanted without any experience in the industry.”

Franchise Network
One of the greatest assets of any franchise opportunity is the community of franchisees. You’ll have access to a group of owners from whom you can get business advice, learn tricks of the trade, and receive moral support. Cooperation between franchisees is a critical component of success. The best franchise companies foster these relationships through annual conferences, regional meetings, online communities, and regular conference calls.

“The Zaxby’s franchisee community is a close one and other franchisees are always willing to lend a helping hand. The input of other franchisees was crucial when opening my first store. Without their advice and support, I would have struggled significantly more,” says Neil Glezen, who owns five Zaxby’s in North Carolina with his wife, Adrianne. “I currently seek out other franchisee advice often when making decisions.”

As a franchisee, you benefit from many things the owner of a start-up does not have access to or would have to pay quite a lot for.

Expedited Profitability
As a franchisee, you benefit from many things the owner of a start-up does not have access to or would have to pay quite a lot for. The most important is that you have a proven road map to success to follow. In addition, your marketing costs are shared and your franchisor negotiates bulk-purchasing rates that are passed on to you. You are also provided with support in multiple areas including marketing, training, and IT. If you had your own business, you would have to pay contractors or staff to fulfill these roles.

Before you completely shut down the idea of starting your own business or exploring other options to franchising, it’s important to consider a few things.

Startup Costs and Royalties
In order to qualify to purchase a franchise, you’ll need a certain amount in non-borrowed assets and must be able to make a down payment. In addition, you must pay an initial franchise fee. You’ll also have to pay a monthly royalty fee.

Not 100% in Control
Brand consistency is probably the most crucial element of a franchise’s success. To maintain it, franchise owners are expected to adhere to the franchisor’s best practices. For example, if you purchase a fast food franchise, you will not be able to tap into your inner creative chef because your franchisor will retain control over the menu. You’ll likely be told which suppliers you can work with as well. The franchisor will probably also determine your business hours, signage, and employee uniforms. In addition, your franchisor will limit your business to a specific location or sales territory to protect other franchisees within the brand. All of this is not perceived as a bad thing by most franchisees.

I like the support I receive from our franchisor. By not having to worry about menu innovation, marketing, etc., I can spend more time focusing on the operations of my business.

“I like the support I receive from our franchisor. By not having to worry about menu innovation, marketing, etc., I can spend more time focusing on the operations of my business,” says Glezen of Zaxby’s. 

Franchise Business Review’s research shows that many franchisees feel entering franchising was the right choice for them. When asked if they enjoy operating their business and if they would “do it all over again”, 89% of franchisees said yes

Determining if franchising is the right fit for you and, if it is, which franchise will best meet your goals, are both essential steps successful franchisees take.

“The first question a first-time franchisee needs to answer is, ‘Do I really want to take the step to be my own boss?’. Any person who has ever gotten into business for themselves, acts from a place of courage and conviction,” says Vic Ciuffetelli , CEO of ActionCOACH.

If you do want to be your own boss, Franchise Business Review’s 2017 Guide to Today’s Top Franchises outlines the steps you should take to make it happen as well as the 200 brands that made our 2017 list of Top Franchises. Franchise Business Review’s Franchise Buyer’s Toolkit is also an excellent resource.  

As the Editorial Director at Franchise Business Review, Emma Pearson reports regularly on today's top franchise opportunities and the latest trends in franchising. She also writes and oversees the publishing of Franchise Business Review's annual Top Franchises, Top Low-Cost Franchises, Top Franchises for Veterans and many other specialized franchise reports. They feature the only lists of top franchises based on feedback from those who know best - the franchisees who own them.

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