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3 reasons why buying a franchise could be better than starting your own business

3 reasons why buying a franchise could be better than starting your own business

Published in Entrepreneur , 25 - January , 2019 abogados franquicias Overview franchises

The following is an excerpt from Mark Siebert's book The Franchisee Handbook: Everything You Need To Know About Buying a Franchise. You can buy it at Amazon and Gandhi.

Franchises are systems that have been tested and refined and then tested again. And having access to that system gives you, as a franchise, the ability to start much faster, reducing your initial investment and avoiding mistakes.

Before you open the doors of your business, most franchisors will give you initial training in every aspect of the business, from finding the best place to how to build your equipment and training it to serve customers. And for many franchisors, training is only the beginning, since they often offer detailed operations manuals that explain how to deal with the situations you will face in day-to-day operations. In addition, many franchisors provide ongoing training and support, either by phone or with field representatives who visit you periodically, or as business coaches and making sure that you and all other franchisees in the system are contributing to the brand's standards. He made the concept successful.

But there are three additional advantages if you buy a franchise.

1. Goodwill:
Regardless of whether the franchisor has a unit or 10,000, undoubtedly his name has more recognition than what you would have as a startup. And if that recognition involves some goodwill at the consumer level, your as a franchise will benefit you.
This is particularly true if you are buying a service franchise. If you were a startup without affiliations, your sales pitch to new clients would be like: "I'm starting my business and I do not have much experience, but I'm going to work very hard for you." But as a franchise, it would be something like: "We have been in the business for so many years and we have had accounts like X, Y, and Z that will be happy to give you references of our work. Now we are expanding to this city and I was wondering if we could talk about business. "

2. Benefits in costs:
Another advantage of buying a franchise is somewhat curious: opening a franchise is less expensive than opening an independent business. It may be hard to believe, considering that you have to pay for the franchise, but this is something real. Why?

As a franchise, you will know exactly how much inventory you need to buy and what equipment you need to rent. And most likely you get better prices for the name of your franchise and the agreements that it has with suppliers. You will learn to promote your business without spending time or money on advertising that does not work. You will be able to control startup costs and avoid errors that could cost you thousands of pesos. You will benefit from the franchisor's experience in hundreds of ways that will help you reduce expenses while increasing your profits.

And additionally, the franchisor will have assumed many expenses that you will not have to do, such as the registration of the brand, the design of the logo, the web page, the advertising materials, the own recipes of the brand (if it is a business of food), develop marketing strategies and establish a chain of suppliers with discounts already negotiated.

The point is that, in many franchises, you will have a cash flow much sooner than if you did not buy a franchise, even having paid the costs of it. And this is particularly true when it is the first business you undertake. So although the initial cost of a franchise may be higher, in a short time you will have overcome that stage and you will start to receive profits.

In a similar way, even if you have to bear the burden of paying for the rights of the brand, you will have access to the support, systems and recognition of the brand that a franchise offers you. Many franchisors will have developed successful marketing campaigns that you can use to make the brand more noisy. And they have greater purchasing power saving you many expenses. And for many franchisors, the fact of being able to win national accounts for you to operate them can add additional benefits.

3. Maintaining power:
And finally, when the time comes to sell your business, a franchise will be worth more money. This advantage is easy to understand: if you were considering the possibility of buying a business and you had to choose between McDonald's and Juan's Hamburgers ... if all the other factors were equal, which one would you prefer to buy?

Let's analyze this. Although buying McDonald's would not guarantee that you make money, it is very likely that changing owners is much easier because McDonald's has the operating manuals and experience to help you make a smooth transition. And above all, McDonald's owners know what to expect from each and every one of their restaurants because the company spends a great deal of time and effort ensuring that their processes are consistent. And with the Hamburguesas de Juan, at the moment that Juan goes out the door, half of his clients are going to go with him. And who is going to help you with the transition process? Who will ensure quality control?

Most people would prefer to buy McDonald's, so the owner could ask for a higher price.

Although the brand is part of this, the real value of your proposal lies in the quality of the system and the amount of support that the franchisor will give you. And in the end, the secret to the success of most franchisors is that they earn a lot of money with their franchises. The franchisors that have millionaire franchises do not struggle to find more franchisees.

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3 razones por las que comprar una franquicia podría ser mejor que comenzar tu propio negocio
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