The thought of transitioning to business ownership has crossed the minds of many, especially those feeling stifled and unfulfilled in their corporate careers. But the idea of leaving the relative security of a salary and throwing oneself into the fray of franchise ownership can be overwhelming. Luckily, International Franchise Professionals Group (IFPG) community of brokers, consultants, and members have the expertise and knowledge to make the transition easier.
Below are the frequently asked questions on franchises near me and their answers:
What is a franchise?
A franchise is essentially a license that allows the franchisee to use the trademarks, logos, and business practices of the franchisor. This buy-in to the franchisor’s established business model offers a quicker and safer way for entrepreneurs to enter into business ownership. The franchisor will typically provide marketing, operational, and other support services for a fee.
What are the benefits of owning a franchise?
The franchisor’s established business model means the franchisee is much less likely to face the usual frustrations of business start-up— such as hiring and managing employees, creating a marketing plan, or meticulously crafting an operational manual. Moreover, the franchisor’s good reputation is likely to drive customers to the franchise, whether that is through existing database of contacts or through increased SEO rankings due to recognition in the market. Finally, support services and mentorship from the franchisor make the ownership experience exponentially smoother.
What are the potential drawbacks of buying a franchise?
The major drawback of buying a franchise is that the franchisee is beholden to the franchisor’s business model and restrictions. This could mean that the franchisee is bound by the same prices that all other franchisees must adhere to, making differentiation difficult in competitive markets. The other major drawback is the initial cost. Buying a franchise is generally more expensive than starting a business from scratch, making it cost-prohibitive to some potential franchisees.
What is the advantage of working with an IFPG professional?
The IFPG has a community of professionals that specialize in supporting aspiring business owners transition into franchise ownership. Working with an IFPG professional gives the franchisee access to a vast network of franchisors, vendors, and knowledgeable experts who understand the nuances of the legal and financial considerations of buying a franchise. Furthermore, IFPG professionals can offer one-on-one assistance for franchisees if they have any additional questions during the process.
What are the key considerations for buying a franchise?
First and foremost, it’s important for potential franchisees to understand the franchise agreement. The agreement will outline jurisdictional rights, financial obligations, and other contractual responsibilities, and so it’s critically important to review it in great detail. Additionally, it’s important to look into the current market saturation of the franchisor and understand the competitive landscape— such as the pricing and location of other franchises— and how that may affect the prospective franchise. Lastly, due diligence is key to franchise ownership success; the franchisee should thoroughly examine the franchisor’s track record, speak to current franchisees, and get a comprehensive understanding of the type of franchise that interests them.