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Pros And Cons Of Starting A Franchise

Updated: Mar 19

The following is an article “Pros And Cons Of Starting A Franchise” by Marc Primo.


For many budding entrepreneurs, the thought of starting a franchise might seem like a lucrative idea. After all, it presents an opportunity for the franchisee to reap the rewards of an already established brand that has proven to be successful in its respective line of business. But, as will all things in life, good things always come at a price.

The following are the pro and cons one must carefully weigh before investing in a franchise business:


The Pros


1. Training included – For novices new to business, training of staff is something that is often neglected. The people who will run the day-to-day operations of your franchise need to be equipped with the right tools and know-how. Many of the bigger companies already have franchise packages complete with management and technical training included to ensure that their brand name is well looked after by the franchisee.


2. Reputable suppliers – One major hurdle when starting a business from scratch is finding reputable, reliable, and reasonably priced wholesalers who you can rely on for supplies. Franchisors have a name to protect and already have trusted suppliers who meet their high standards. Assuming you meet all the requirements, they will be happy to share their tried and tested suppliers with you, making the start-up phase a lot more efficient.


3. Free marketing support – Global brands like McDonald’s, for instance, usually have seasonal products that they push through strategic nationwide advertising campaigns. As a franchisee, your store can benefit from this sort of marketing support, at no extra cost to you whatsoever.


The Cons


1. Big expenses – Considering that a reputable brand is about to entrust its name to you, starting a franchise can be an expensive investment, with initial outlays costing far more than starting your own independent business. What’s more, the high costs don’t end there. Once your franchise is running smoothly, you will be required to pay a regular fee to the franchisor, or royalties, for the right to earn money using their name. These are just some of the expenses that could greatly reduce your profits in the long term.


2. No flexibility – Most franchisors are already set in their ways and will have you follow strict guidelines to a T. This means having to adapt to their work processes, product lines, and overall brand standards. If you are interested in going into business wherein you have the flexibility to call the shots as far as operational practices and product innovations are concerned, then starting a franchise is not for you.


3. Unrealistic expectations – Just because the franchise you are looking to start is a reputable and well-loved brand does not guarantee it will be peaches and cream for you. As always, good business acumen coupled with common sense will improve your chances of turning a profit. Factors such as location, staffing, and all-around sense of responsibility are all mandatory from your end to ensure you have done your share of due diligence in becoming a successful franchisee.

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