Business Q&A - Franchises

This question came in from a “young entrepreneur”.

 What do I think about franchises?

Are they for me? No. Are they for you? I would say probably so without knowing more.

Franchises are great for the those that want to start a business whom are not that business savvy. Even for those that are business saavy a franchise will have a higher chance of succeeding vs an independent setup more times then not.

Many people will say when you buy a franchise you are paying for branding which I do agree with. It is easier to start a Subway with everyone knowing the brand that it is to start “Jim Smith’s Soothing Taco Hut”. But the core thing you are paying for is a fully functional and proven business. That includes the branding, marketing, the product, the store layout and all the operations to go with it(you will still need to buy some equipment outside of the startup fee’s). Those operations also include some basic cost accounting and profit margin calculations so you know what you may make if you turn X amount of sales.

Another good thing about franchises is the assistance you will receive from the corporate office. This includes training on the business and all of it’s equipment and the most important part is they will help you choose a location so hopefully you don’t make the wrong mistake on choosing a site.

With that being said I still like running my own gig and I would be willing to risk failing to do so.  I like to roll the dice and I would rather roll the dice then pay someone a percentage of my profits forever.

Are you a risk taker? Well, maybe you are better off with the franchise if it took you a moment to think about that.

If you enjoyed this post, make sure you subscribe to my RSS feed!