Top 6 Benefits of Buying an Existing Franchise
In 2017, the franchise industry was expected to grow to $710 billion and employ over 8 million people, according to the International Franchise Association (IFA). The industry has seen steady growth in the past seven consecutive years at over two percent each year. And, these businesses keep work and jobs in the US as the vast majority cannot be outsourced.
A Known Brand
One of the biggest reasons that a new business fails is due to the fact it has to introduce a new product or concept to a marketplace filled with products and services already familiar to the customer. Both consumers and investors want proof of concept before they try something new.
For this reason, buying an existing franchise saves you hundreds of thousands of dollars and potentially years of audience education. An existing franchise has already done all of the groundwork for you so that you can focus fully on your team, operations and your clientele without the financial and timely stresses of educating people on a new concept.
It is likely that the owners of the franchise brand will have a company-wide marketing strategy in place to ensure that the integrity of the brand remains intact, as well as to ensure that the overall goals of the locations are uniform in their execution. You may have to pay a monthly marketing fee, however, you will not have to spend hours each month trying to analyze all the data from marketing campaigns to determine the methodologies that are working or that are not working.
It is still a good idea to review your analytics at a local level to establish sales, price points and anything else you have control over at your own establishment. However, at the end of the day, you can breathe a lot easier knowing that if you buy a franchise, the target demographics, logos, colours, uniforms and more have already been established for you.
Many startups lose a significant amount of money during the initial trial-and-error portion of their business launch. Most people struggle for months, if not years, to find the right formula for the amount of inventory to keep in stock, when to reorder, the number of people to staff at one time, the ways consumer demand changes during various cycles, who are the right suppliers, etc. Buying a franchise allows you to avoid these pitfalls which means you will be making money from day one by not having to waste time and resources on determining the best ways to streamline your business.
Buying a franchise forces you to focus on continuous improvement at all times. The corporate brand will make sure that you remain relevant to all accounts. They may send notifications to let you know it is time to upgrade your technology or to install a new app to improve the back end. They may inform you of new products or services that need to be incorporated based on changing consumer preferences and market changes. They may even provide you with financial assistance to upgrade the look of your location to ensure your physical location does not go out of style and drive consumers to the competition.
An existing franchise will already have the kinks worked out for the hiring and firing process. They will have established the ideal candidate for the type of work involved for each position. They will have established the perfect number of people to be working at any time of day and season. And, training will already be in place so that you do not have to create a training program from scratch. They might even provide a handbook or guidance in the event you have to let someone go for any number of reasons that will also make your life easier.
When you buy a franchise, you save money, stress and precious time. And, you already have a support team in place to keep you informed of updates that need to occur on a regular basis to keep your business relevant and primed for growth. If you are thinking of starting your own business and you do not want the risk associated with a startup, eliminate the majority of the risk and invest in buying an existing franchise for the greatest chance at high returns and long-term success.