Opening a franchise business is an attractive option for couples looking to gain time freedom and flexibility. With the International Franchise Professionals Group (IFPG) assisting with the process of narrowing down and selecting the best possible investment, many couples are considering investing in a franchise business due to the low financial risk and a greater probability of success. Here, we provide answers to all the most commonly asked questions about investing in a franchise business.
What are the Benefits of Owning a Franchise?
The biggest benefit of owning a franchise is that the franchisee is able to expand their network and access existing customers and services that may not be available to standalone business owners. This gives the franchisee an opportunity to work within an already successful system while utilizing highly successful marketing strategies, technology and access to the parent company’s established relationships. Additionally, the franchisee gains access to a track record of legal and financial reporting as well as successful operational procedures. This gives franchisees an advantage over independent startups, as these processes may be too costly or difficult for an independent business owner to develop.
Is There More Security in Opening a Franchise Instead of Starting a Business from Scratch?
Yes, there is. Due to the fact that the franchise system has already been established, the franchisee will have access to a brand that is already recognizable to customers and that has a proven track record of success. Furthermore, the franchisee will be supported by a franchise team who is experienced in dealing with the specific type of business and in navigating the system. When starting a business from scratch, business owners may find themselves forced to face numerous complications such as navigating the legal aspects of business operations, product pricing and advertising.
What Types of Franchise Opportunities Are Available?
Franchise opportunities span a wide range of industries and they vary greatly in size and scope. For example, there are franchise opportunities that range from small businesses (such as a hair salon) to large businesses (such as a fast-food chain). Additionally, some franchise opportunities are home based while others require a physical store or office location.
Do I Qualify for Financing to Start a Franchise?
Yes, most banks and other lenders offer financing opportunities for franchisees. The financing will depend on the type of franchise opportunity and the lender’s criteria. It is important to note that some lenders require the franchisee to have a satisfactory credit score, a minimum liquidity, and a minimum of three years of experience in a related industry.
Are There Any Fees Involved?
Yes, there are various fees involved in opening a franchise business. These may include the startup cost, franchise fees, ongoing royalty fees, and sometimes marketing fees. It is important to understand all the fees associated with the franchise opportunity before investing.
Are There Any Restrictions on How I Can Operate My Franchise?
Yes, franchisees are obligated to follow the system set up by the parent company when operating their franchise business. This means that franchisees are not allowed to deviate from existing procedures unless provided permission. Franchisees may be limited to certain locations, or prohibited from selling particular products or services. As such, it is important to fully understand the requirements and terms of the business before investing in a franchise.
Will I Get Any Training or Support?
Most companies that offer franchise opportunities provide some sort of training or support. This can range from courses and training webinars to weekly meetings. Additionally, some franchise companies offer assistance with marketing and provide educational materials to help with business development.