Franchise Businesses: The Right Choice For New Entrepreneurs
- By Pamela Upshur
- Published 05/11/2009
- Business
- Unrated
Pamela Upshur
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Not all entrepreneurs have the courage and the time to nurture a business from nothing. They would rather buy a franchise of a well-established business. There's nothing wrong with it, in fact, it may be the best move to follow if you're a new entrepreneur. You could own a franchise business alone, with a partner, or conduct it in a corporate business setting. Some examples of successful businesses open for franchising are 7-Eleven, McDonalds, Holiday Inn, Starbucks, and many others.
Franchise businesses employ more than 9 million people in the U.S. alone. It's estimated that 40% of consumer money are spent on franchise-produced goods or services. That's close to a trillion dollars in national sales every year. One in every 12 businesses opened in America are franchises. That's 1 new franchise business opened every six and a half minutes during business hours. More than 80 percent of these new franchise businesses are restaurants, followed by retail stores, hotels, motel, automotive parts store and repair center.
The American franchisors have spread their wings overseas also. The Golden Arches are now famous in 117 countries around the world, with over 25,000 restaurants. They're racking up customers looking for fast-food and they're competing with local brands without a hitch. Because of this tremendous success by McDonalds, the Interbrand Group tagged this stars and stripes company as the world's greatest brand today. McDonalds is not through with conquering the world just yet. In the next 4 years, they are on a marathon to open many more Golden Arches outside the U.S.
What are the benefits of owning a franchise business?
1. Access to professional help and established business culture. A new entrepreneur doesn’t have to go at it alone. He or she has years of research and development to rest on if he or she met some problems in the business along the way. Company consultants are just a phone call away to guide you on how to solve marketing, operational, and
managerial problems that may arise. You are never direct competition with fellow franchisee. In fact, your regular convention is your source of new ideas and lessons to apply in your locality.
2. Your name is on the business owner plate. Although you are buying someone's brand, your franchise money allows you to own the business in your area 100%. Your employees follow you as their boss. Although some company regulations and strategies still apply, you still own the business.
3. Your business is recognized from the get go. Nationally known brands are not hard to sell. What more, if your brand is known around the world. You don’t have to spend time and money on branding. It's a done deal for you!
4. Easy access on financial help and advice. No franchisors want to learn that one of the stores carrying their name have closed because of bankruptcy. If they learn that one of their franchisee is in financial trouble, their financial advisers, analysts, and accountants are on the next flight going to the local franchise area. Franchisors are even willing to loan cash themselves to help raise an ailing franchise branch above the water. SRA International Inc. is well known to give their franchisees $20,000 to $35,000 initiation fee to be paid from revenue over a period of two years or more.
If others are buckling down to economic pressures, franchise businesses are well known to remain standing in the midst of the chaos. In fact, franchise businesses have 66 percent rate of success compared to individual businesses said the Washington D.C. based International Franchise Association. But because of this high rate of success of franchised businesses, many fly-by-night franchises are springing up everyday – entrepreneurs should watch out for the brand they are franchising.
The phenomenal success rate of franchised businesses is no accident. This fact is based on sound economics and business principles which have been proven for years since the first franchised brand appeared. Franchised businesses are giving the most competitive and relied products and services around the world, and for sure, they are here to stay.
Franchise businesses employ more than 9 million people in the U.S. alone. It's estimated that 40% of consumer money are spent on franchise-produced goods or services. That's close to a trillion dollars in national sales every year. One in every 12 businesses opened in America are franchises. That's 1 new franchise business opened every six and a half minutes during business hours. More than 80 percent of these new franchise businesses are restaurants, followed by retail stores, hotels, motel, automotive parts store and repair center.
The American franchisors have spread their wings overseas also. The Golden Arches are now famous in 117 countries around the world, with over 25,000 restaurants. They're racking up customers looking for fast-food and they're competing with local brands without a hitch. Because of this tremendous success by McDonalds, the Interbrand Group tagged this stars and stripes company as the world's greatest brand today. McDonalds is not through with conquering the world just yet. In the next 4 years, they are on a marathon to open many more Golden Arches outside the U.S.
What are the benefits of owning a franchise business?
1. Access to professional help and established business culture. A new entrepreneur doesn’t have to go at it alone. He or she has years of research and development to rest on if he or she met some problems in the business along the way. Company consultants are just a phone call away to guide you on how to solve marketing, operational, and
2. Your name is on the business owner plate. Although you are buying someone's brand, your franchise money allows you to own the business in your area 100%. Your employees follow you as their boss. Although some company regulations and strategies still apply, you still own the business.
3. Your business is recognized from the get go. Nationally known brands are not hard to sell. What more, if your brand is known around the world. You don’t have to spend time and money on branding. It's a done deal for you!
4. Easy access on financial help and advice. No franchisors want to learn that one of the stores carrying their name have closed because of bankruptcy. If they learn that one of their franchisee is in financial trouble, their financial advisers, analysts, and accountants are on the next flight going to the local franchise area. Franchisors are even willing to loan cash themselves to help raise an ailing franchise branch above the water. SRA International Inc. is well known to give their franchisees $20,000 to $35,000 initiation fee to be paid from revenue over a period of two years or more.
If others are buckling down to economic pressures, franchise businesses are well known to remain standing in the midst of the chaos. In fact, franchise businesses have 66 percent rate of success compared to individual businesses said the Washington D.C. based International Franchise Association. But because of this high rate of success of franchised businesses, many fly-by-night franchises are springing up everyday – entrepreneurs should watch out for the brand they are franchising.
The phenomenal success rate of franchised businesses is no accident. This fact is based on sound economics and business principles which have been proven for years since the first franchised brand appeared. Franchised businesses are giving the most competitive and relied products and services around the world, and for sure, they are here to stay.