The process of starting a new business often occurs with lots of difficulties, it is pretty much difficult to go through the process of backing bread from the scratch.
Starting a new business usually comes with so many risk, you might not even be able to discern the next line of action. However, I have learnt that the act of purchasing a franchise is usually less difficult than building a new business entirely.
Purchasing a franchise could be compared with getting a good recipe and the reason is because the one who owns the franchise already made lots of mistakes which have been developed and corrected over time, the franchise has successfully handled the stages of trial and error, this implies that during the process of buying a franchise, there are so many things you buy with it.
While buying a franchise, you are also buying the name, the knowledge a well as the expertise that has been acquired by the business owner over time, which makes it possible to overcome certain risk associated with the business and this means that with a franchise, there are lower chances of failure.
Description of a Franchise.
A franchise could be described as a business purchased by a franchisee.
A Franchisee is the individual who purchases the franchise.
A franchisor is the company that is selling out its business name to buyers.
Advantages of Purchasing a Franchise.
• Buying a franchise reduces the risk associated with failing in business, this is because the franchisee is buying an existing system that has been through various test and bad times.
• The franchisor is always available to give guidance and advice wherever necessary.
• Since the franchise has been existing for some time, it will have connecting with advertising and marketing agencies which will make association with bigger franchise and other amenities easier instead of trying to build relationships from the scratch.
Disadvantages of Purchasing a Franchise.
As good as it sounds to be a franchisee, there are certain disadvantages associated with it and they are:
• The process of purchasing a franchise is usually expensive and the reason is because with the business, you are also purchasing the logo, the expertise, as well as the system involved in the system.
• The signed contract might still leave the franchisor in a great power position and this might result in an unhealthy relationship between them.
• As a franchisee, you do not possess the right to run your business the way you seem fit, this is because you have to run your business with the set principles of the company.
While lots of franchisees find it difficult to get along with franchisors, there are others who find it easy to get along. The truth is that, there are good franchisors and there are also bad franchisors, it however depends on the franchisee to make proper research before venturing into the process of acquiring a franchise.
Its a very valid point. In the software industry this is often called as channel partnership.
There are also horror stories from the likes of Subway wrt franchises. (reference: https://www.nytimes.com/2019/06/28/business/subway-franchisees.html )
Hi @mojubare
Interesting read. I think as you say, there are good and bad franchises. You also lose some control but I know some have made good business by running a franchise business.
Yes, it is very possible to make good business by running a franchise, that is one of the reason why it is essential to look out for the good ones.
@tipu curate
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Hi @mojubare
Very lovely choice of topic, franchise is a form of license that a celebration acquires to allow them to have access to a industry's proprietary potential, processes, and emblems with a purpose to enable the social gathering to sell a product or furnish a provider under the industry's title.
Hi @mojubare
Of course, if it is a good way to invest, you put aside making mistakes.
and you are very right the franchises have already overcome errors that you are not going to commit.
However, for those who do not have the money to buy one, they must undoubtedly start their own business.
Saludos.
Definitely dear friend, those who do not have the money to purchase a franchise must go through the stress of starting their own business, thanks for stopping by.
Just like you mentioned, franchising comes with it's good side as well as disadvantages.
It is important to study properly before venturing into it to avoid regrettable mistakes.
Proper study is essential for venturing into any business type. Thanks for reading.
hi @mojubare
Franchises are a world apart and as in any business they depend on how much you want to bet on them. They require investment and the positive side that I see is that you already have most of the road traveled so there is a greater feeling that you are successful and less work because you already have almost everything done. Now the bad part is that it is very difficult to create an identity because they already come with one that you acquired. Interesting and professional post.
Thank you dear friend, your contribution is greatly appreciated.
Thank you dear friend, your
Contribution is greatly
Appreciated.
- mojubare
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With good money, franchising is one thing I would love to go into, thanks for the helpful tips though, I will carry out a proper survey before venturing into any franchising business.
Franchising is a great idea if the company involved is a reputable one.