12 Reasons for Investing in a Franchise

There are some obvious advantages in investing in a franchise, the most important being that you will be buying into a tried and tested business concept. It may more expensive, (although there are some low cost franchise oppotunities out there), than starting your own business in the same sort of market but it does bring with it a recognised established brand image. It is estimated that whilst only one in five new-start businesses will still be trading after five years, some 90% of franchise operations will have succeeded.

There are numerous benefits in investing in a franchise some of which are:

1. You will have the opportunity to purchase a business concept that has already been tried and tested in the market.
2. The risks of setting up a franchised business are substantially reduced when compared to establishing a new business in the same market.
3. A franchise will provide a brand image that the public will recognise.
4. Business premises will all comply with an established interior and exterior design to assist with brand promotion.
5. Specifications for the equipment required by the franchise will be clearly identified from the outset.
6. Publicity and ongoing marketing can be arranged by the franchisor as part of the contractual agreement.
7. Comprehensive training in all aspects of running the business will be given to you by the franchisor, both initially and on an ongoing basis as methods are improved.
8. The ‘operations manual’ received as part of the franchise will give standardised procedures for accounting, sales, and stock control.
9. The franchisor may be able to provide you with better terms for the centralised bulk purchase of raw materials or goods used by the franchise.
10. As the franchisee, you should benefit from the franchisor’s ongoing research and development undertaken to improve the franchised product or service.
11. Networking with other franchisees will provide both you and the franchisor with opportunities for review and improvement of the operating procedures.
12. The franchise should have a clearly defined geographical area within which the rights of the franchise are protected from other franchises from the same franchisor.

The final advantage of investing franchise opportunities, as opposed to starting your own business, relates to raising funding for the venture. Gaining finance to purchase a franchise, (6 common costs) is generally easier than gaining finance to start a new business. The reason for this is that the franchisor will be better able to provide estimates of the likely sales and costs, thereby giving a more accurate prediction of profit levels.

Not sure where to look try this list of top 500 franchises. Also here’s a handy Introduction to Franchising PDF to print off and read to bring you up to speed with the ways of franchising.