The question often arises whether it is worthwhile buying a franchise and paying fees to the franchisor when one can establish a company and start a similar business on one’s own. In making a weighted decision, it is very important to understand the franchising business model, its benefits and risks as well as to become acquainted with the anatomy of relationships between franchisee and franchisor.
There are many reasons why entrepreneurs start their own business: some of them do it for money, others for power, some wish to materialize their creative potential while others seek independence. Quite alike, number of reasons might motivate you to start a business by buying a franchise. For example, some buy franchises because they want to invest in a proven business model, some become franchisees because they like the products of a particular franchise trademark and others look for an alternative to employment in a form of running a franchised business.
There are no single typical profile of the franchisee in the world. Active franchisees might range from sole operators of mom-and-pop store to large multinational corporations operating thousands of units. Generally, a person (either a natural or legal) buys a franchise because he or she expects to create a profitable and sustainable business faster and with less resources as well as to run it more efficiently and with less risk than he or she would manage to do it independently without the assistance of the franchisor.
It is vital to understand that each franchisee is personally responsible for success of its business built on the foundation of a franchise. Although any good franchisor is keen to see its franchisees flourishing and will do his best to assist them in their business, however he is not solely responsible for their success. For the franchisee, being smart, competent and hardworking is a key to building a strong and sustainable business that will exploit benefits and avoid pitfalls of franchising. In the end of the day, if the franchisee will go out of business he or she will bear the major financial loss.
In order to increase the probability of success each prospective franchisee must address the process of selecting and acquiring a franchise with extreme care and thoroughness. For your convenience, you can read more about
- Benefits of buying a franchise here >>>>
- Risks of buying a franchise here >>>>
- Steps of selecting and acquiring a franchise here >>>>