Why Buy A Franchise?

"Some major advantages and benefits of buying a franchise business opportunity"

Minimize Your Risk: One of the primary and major reasons you should consider buying a franchise business opportunity (versus starting a new independent business from scratch), is it gives individuals the opportunity to go into business for themselves with an excellent chance of success, while at the same time minimizing your risk of failure.

Starting a new business is inherently risky. Most studies conclude that over 90% of new businesses fail within 3 to 5 years. In comparison, U.S. Dept of Commerce studies have shown that over 92% of franchised businesses are still operating after 5 years in business.

Buying and owning a franchise is not for everyone. And there are some obvious disadvantages to buying into a franchise business like the lack of complete control and required payment of franchise and royalty fees for example. That being said, the overwhelming success of franchising as a viable and proven business model in the USA and around the world is simply undisputable.

Below is a list of other well known advantages and benefits of buying and starting a franchise business today.

• Risk Reduction: Franchise industry stats indicate that the franchise business failure rate is approximately 2 to 3%, compared to over 80% for all new independent businesses started.. Although some small business experts believe that the failure rate for franchise businesses is higher that 3%, few would argue that its not significantly less riskier than pursuing an independent start-up business from scratch.

• Proven Business Model: One of the major hallmarks of franchising is that it can offer entrepreneurs a turnkey business model with established and proven operating systems, services, and products already in place. This dynamic can help save invaluable time and resources in the start up phase of for any new franchise owner that is seeking to achieve profitability as quickly and efficiently as possible.

• Financial Assistance: Many established franchisors can often offer assistance in financing a new franchise business either directly in house or through arrangements with other lending institutions they have a relationship with. Keep in mind that  securing SBA financing to start a proven franchise concept is often much easier than attempting to get financing for an independent start up business. Some franchise companies have also already been reviewed by the SBA and are eligible for a faster loan review process. You can view a list here: http://www.franchiseregistry.com/Registry/

• Franchiser Marketing Assistance: This includes developing effective and proven marketing plans for local and niche markets. In addition, many  franchisers have the resources and experience to develop regional and National marketing programs that benefit all franchise owners in the system.

• Management/Consulting Assistance: An established franchiser can offer and transfer a wealth of knowledge and training on how to successfully manage and operate a new franchise business. Keep in mind that the Franchiser has a vested and shared interest in your success and will provide the support and training necessary to ensure you are ultimately successful.

• Franchise Site Assistance: Most retail franchise and restaurant franchise companies play a very active role in helping new franchisees select locations that have the best chance of providing good traffic and exposure. They can also help negotiate leases and provide invaluable advise and assistance during the build out phase of a retail location.

• New Products and Services Development: To stay competitive in the market place most successful franchise companies will devote the necessary time and resources to develop new and profitable products and services.

Note: This information is intended for research purposes only. Always consult with your legal and financial advisers before making any investment decision.

About Author:

Ray Haiber has 12 years experience as a professional Business Broker and franchise sales  consultant.

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