How Franchising Will Change Your Life?


A lot of people struggle with so many ideas that they just can’t seem to execute. The problem is that while they recognize that they have the ambition, motivation and energy to make it in the business world, the logistical situation seems pretty unsolvable. There’s so much to calculate, plan and come up with. In the end, even this may not be enough.

This is why franchising can change your life. You can take something that you’re already doing and turn it into a lucrative profession by just buying a franchise within the same industry. Fundraising for franchises is easier than you would expect it to be. The rest of the process tends to be simplified as well.

While all of this doesn’t make franchising easier, it does make it more viable and potentially more lucrative. Here are several examples of all that franchising has to offer to an aspiring entrepreneur.

More Control Than You Expect

The first thing you need to do is debunk the myth that buying a franchise means working for someone else. The majority of rights that the franchisor has will never be exercised as long as you’re running a profitable business. So, why would someone choose to buy a franchise rather than start an original business?

Low-cost opportunity to become an entrepreneur

Franchises are incredibly cost-effective, which is why they represent one of the cheapest ways for you to become an entrepreneur. In practice, this allows you to get a more viable break-even point. In fact, in some industries, you can buy a successful franchise for several thousand dollars. Starting an original business would cost you much more than that.

It’s different from licensing

One of the biggest misconceptions of the business world is the fact that some people mistake franchises for licenses and vice-versa. A franchise requires:

  • The license of a trademark
  • Payment of a fee
  • Control over how someone operates a business

License, on the other hand, has a much narrower scope. Selling a license means giving someone the right to do business under your trademark. This is access to a single asset, which could be a technology, company name or even a formula or a recipe.

Franchise is territorial

The next thing you need to remember is that buying a license means buying the right to do business on a certain territory. This means that another license won’t be sold to your competitor, which already provides you with a certain advantage. Keep in mind that major franchises are major competitors and that having just one out of the way makes a world of difference.

Wrap up

In the business world, you’ll often be faced with so many things they can’t control. By buying a franchise, you’re getting some of these unforeseeable factors out of the way.

Brand Recognition

The first step in building brand loyalty is the brand recognition stage. To have opinions and feelings about your brand, your customers need to get to know it first. This takes time; time that can be cut short through franchising.

Profiting on someone else’s success

To build customer trust, you would have to invest years and years of hard work. Fortunately, by buying a franchise, you can just open a business and ensure that your target audience already has a preconception about your business. How? Well, because other franchises did a good job at establishing your trustworthiness and credibility in the industry.

You can’t compare the starting trustworthiness level of a brand like ChaTime with a random new bubble tea brand. Since the first one has more than 125 outlets in Australia, it is already a household name in the industry. Therefore, it has more than a slight head start.

No intellectual property problems

Coming up with intellectual property is a huge challenge, regardless of how long you are in the business. First, you need to find a name that’s not only available but also appropriate and marketable. Then, you have to come with company colours (that make sense from the marketing standpoint), logo, product line, recipes, business model, etc. This alone is a major reason why a lot of potential entrepreneurs postpone starting a business.

Trademarks are recognized regionally

Previously, we’ve talked about intellectual property and whenever this topic is brought up, the key point in the argument is one of the trademarks. You need to understand that trademarks are recognized regionally. This is why Burger King has to go under the trademark of Hungry Jack’s in Australia and why Wendy’s can’t register under that name in the EU. Still, even without the name, there are many other aspects of brand identity worth paying for.

Wrap up

Dealing with marketing and intellectual property is exhausting. Being able to skip this step can already be a huge relief and a reason enough to register as a franchise.

Superior Analytics and Forecasts

It is a known fact that franchisees have a higher chance of success than original businesses. This is not just an advantage but a result of a series of benefits.

Better preparation

According to the majority of surveys, about 43% of all startups fail because they don’t conduct proper market research. With a franchise, market research is not that big of an issue. After all, you can just look at a franchise of similar size in a neighbourhood that has a similar demographic. This means that financial projections and forecasting become a lot easier. Proper analytics can make your growth more dependable and your results more reliable.

Tested business model

Mike Tyson once said that everyone has a plan until they get punched in the mouth. Prussian General Helmuth von Moltke once said that no battle plan ever survives the first contact with the enemy. In essence, both of these statements claim the same – no amount of preparation will prepare you for the realities of the business world. By buying a franchise, you get to invest in a business model/product/service that is already tested and shows favourable results.

Simpler fundraising

While raising funds, people won’t just entrust their money to you for no good reason. They’ll want to see some data and when you’re planning to start an original business, you won’t have much data to show them. This is why franchising is so game-breaking. It already has volumes of data and successful examples to show. Also, the fact that franchises, by default, have a higher success rate does a lot to persuade these potential investors of yours.

Logistical advantages

Not all benefits of buying a franchise are speculative. A franchisor will often provide you with training to get your staff up to speed and enable them to perform in agreement with their corporate standards. Also, they might put you in touch with the supplier, provide you with some additional leverage. It’s a lot easier to negotiate as a part of a larger organization.

Wrap up

When starting in the business world, you’re always heading into the unknown. With a franchise, you’ll have a much better idea of what you’re getting yourself into.

Potential Problems

There are some downsides to running a franchise as well, not all is sunshine and roses in this field. The franchisor still has a lot of power, even though they might choose not to exercise it too often.

The franchisor can change the rules

While this doesn’t happen very often, the franchisor has the right to change the rules at any time and for any reason. They’re the primary owner of the brand, which gives them the right to make changes regarding its intellectual property. The thing is that the business model is intellectual property, as well, which might put you at a disadvantage.

Unprofitable marketing demands

Sometimes, the franchise may decide that a promotion is a great idea, even though the numbers for the franchisee will be less than favourable. The franchisor has the final say, which is more than difficult from the logistical standpoint. The same goes for discounts, etc. There are some instances in which the franchisor may require you to introduce policies that you won’t agree with and you won’t have much say in the matter.

The arbitration is usually biased

Whenever there’s an arbitration between the franchisor and the franchisee, you can expect it to be fairly one-sided. First of all, they are usually within their legal rights to make decisions in the grand scheme of things. Also, they usually have the home-field advantage, seeing as how they’ll probably be the one choosing the arbiter.

Wrap up

Even though the majority of franchisors choose the hands-off approach as the most effective, this is still up to their own choice. Legally, they are in their right to interfere. This is a concept that a lot of entrepreneurs find to be unacceptable.

Keep in mind that while all of this might be the case, the majority of franchisors don’t have a track record of such behaviour. More likely than not, you’ll be left alone to conduct your business. Still, you must know the risks before you decide to act.

In conclusion

All in all, franchising allows you to work smarter instead of harder. It gives you a simpler way to start your own business. Now, before anyone starts arguing that it’s technically not “your” business, in practice, for as long as you’re profitable, you won’t be able to tell a difference.

Sure, those who are interested in being the creative mind behind a business, should still think about building their own original business, perhaps even becoming a franchisor themselves at one point. For the time being, nonetheless, the list of benefits that comes from buying a franchise seems to be quite impressive.

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