Pros & Cons of Buying a Franchise
Jack Burris is president of Red Beard Marketing, a marketing, business development and brand consulting company based in Charlotte, NC. RBM is a full service firm, and we also happen to have a lot of experience in the franchise vertical and currently work with some of the best and brightest minds in the franchise community including Franconnect, Franchise Business Review, Franchise Payments Network and FranchiseWorks LLC, all small businesses designed to help franchisors, franchisees and interested investors through the franchise process. RBM is always results-oriented.
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This week and next we’re going to take a brief look at some of the pros and cons of buying a franchise. We’ll start with the pros – feel free to post comments about each of these. Next post will feature the cons and will provide us various opinions for a lively discussion.
Pros of Buying A Franchise
- Turnkey System: A franchise system is a proven system for operating the business and generating profits. If your skills are weak in sales & marketing or operations then a turnkey franchise may be best.
- Franchise Support: Small business owners often have very little support or lack a support team with business acumen. Buying a franchise offers the opportunity to share your challenges with other like-minded entrepreneurs. As franchise companies state, you’re in business for yourself, but not by yourself.
- Brand Name: The more established franchises provide a market awareness & brand name to franchisees. This can amount to great savings in customer acquisition costs and allow for more time in the operation of the business.
- Lower Inventory Prices: The collective buying power of a franchise group allows for lower costs in purchasing inventory and equipment. Independent businesses usually have less bargaining power with suppliers.
- Easier Staff Recruiting: Finding good employees is a critical success factor for many independent small business owners. A franchise business with a recognized name will have greater recruiting pull than an unknown business entity.
Source: Small Business information on About.com