Why Owning a Franchise Might Be the Right Business Move for You  

Thinking about running your own business but wary of starting from scratch? Buying a franchise may offer the perfect blend of independence and support. Franchise ownership allows you to operate under an established brand name, tapping into their proven business systems and support from experienced franchisors. Let’s break down the benefits, costs, and long-term growth potential of being a franchise owner – and see why owning a franchise might be the right business move for you.

What Are the Main Benefits of Owning a Franchise? 

One of the biggest advantages of joining a franchise is tapping into their established brand presence. You gain an instant reputation to help attract customers from day one. For many business owners, this immediate market presence is a significant advantage to franchise ownership. 

Starting and running a business from scratch can be intensive. There’s lots to plan, implement and optimise as you grow. With a franchise, you avoid much of this uncertainty. Franchise businesses are built on tried and tested models that have succeeded in different locations, so you can operate confidently knowing there’s a blueprint for success. 

Most franchises offer training and support, covering everything from daily operations to marketing strategies. This will get you up to speed quickly, and the ongoing guidance can be invaluable for those new to business ownership. With resources like recruitment, staff training, procurement, operational manuals, and regular guidance, franchisees are rarely left to figure things out on their own. 

Costs Involved in Buying a Franchise 

Initial Franchise Fee 

This upfront fee is your buy in, it gives you the rights to operate under the franchise’s brand name. The cost varies significantly depending on the franchise, but it’s typically one of the larger expenses you’ll face in the beginning. This fee can be a hefty investment, so it’s important to research what you’re getting in return. 

For franchisees opening a physical location, costs associated with land or premises can be significant and vary depending on location, size, and the franchise requirements. If the franchise is in a high-demand area, such as a city centre or popular retail park, costs for leasing or purchasing premises may be higher. It’s normal for the franchise fee to include fit outs to ensure the POS is all in line with the brand and other locations. 

Ongoing Royalties / Leases 

Most franchises require franchisees to pay ongoing royalties, usually calculated as a percentage of gross sales. These royalties fund the support and resources provided by the franchisor, ensuring that you continue to benefit from the brand’s success and development. 

Marketing & Advertising Contributions 

Franchisees often contribute to a central marketing fund. While this involves an extra cost, it allows you to benefit from national or regional advertising campaigns that would be out of reach for most independent business owners. This marketing power can help drive business your way and increase brand visibility. 

Operational Costs 

You’re responsible for everyday business expenses, such as property leases, equipment, inventory, and staffing. While some franchisors may offer help with equipment sourcing or initial setup, it’s important to have a detailed budget plan for these ongoing costs. 

How Scalable is Franchise Ownership? 

Once franchisees have established themselves and feel confident in the operational aspects, it’s commonplace for the owners to invest in additional locations and stores.  

Franchisors will welcome expansion by their more successful franchisees, this is an easy way to scale your operations. Franchisees with several locations can centralise resources such as inventory storage, marketing efforts, and staffing, reducing costs and improving efficiency and ultimately increase profit margins as operations scale. 

Buying a franchise can be a lucrative option for anyone looking to start a business with the support of an established brand. Benefits like brand recognition, established business model, and ongoing training, franchising offers a proven route to business ownership.  

Now we’ve covered why owning a franchise might be the right business move for you, if you’re considering buying a franchise, consulting with legal and financial advisors can help ensure you understand all obligations involved and align the opportunity with your goals. Contact Caversham’s Business Solicitors today.