Are you thinking of investing in a franchise or opening a business and don’t know where to start?
On the one hand, the franchisee runs fewer risks by being under the control of a company that is already powerful. Therefore, it is easier to recover the initial investment. In this article we are going to show you the many advantages of opening a franchise.
WHAT IS A FRANCHISE?
The first thing that we must have clear is what the business model based on the franchise consists of.
A franchise, as we have said, is a business model that has two parts: the franchiser and the franchisee.
On the other hand, the franchiser owns a brand that is already consolidated in the market. In order to expand his business, he assigns the right to use his brand to other people, who in this case are the franchisees. The use of this right is limited both geographically and in time.
Franchising a business is one of the best decisions a successful business owner can make.
ADVANTAGES OF OPENING A FRANCHISE
INVESTMENT RISKS ARE REDUCED
Although, as in all businesses that start from an investment, there are risks, in this model, they are reduced. This is because the brand is already established and consolidated in the market.
The public already knows it, so if the franchiser has a good brand image, success is practically assured. So much so that studies show that the businesses that are opened through this system are the least likely to close.
THE PROFITABILITY OF THE BUSINESS IS GREATER
If we measure the economic benefits compared to the expenses that result from opening a business, the franchise model is more profitable than the traditional business model.
From the first moment we already have a prestige as a result of the leading brand that will give us the possibility of saving expenses in multiple areas of the business.
In addition, the growth of the business will be greater as the company is expanding into several territories and is known by more people.
To do this we must be guided by the franchisor at all times, since the good work of the franchisee following in the footsteps of the original owner, will be of paramount importance for the business to prosper.
A MINOR INVESTMENT IS REQUIRED
Opening a business through a franchise means reducing investment costs. One of the main reasons for this is that the franchisee belongs to an economic and logistic chain and can therefore take advantage of the economies of scale and the benefits derived from this.
When the company orders from all its franchises, it orders larger quantities, so the unit cost is reduced. In addition, it can obtain better competitive advantages as a result of negotiation, since they are strong groups within the market.
The franchisee has the exclusivity of the area, since an approximation ratio is established in which he cannot open another business of the same brand. In this way it is easier to reach our target audience.
If all these advantages have convinced you to open a franchise, you should know that you have to put yourself in expert hands that will advise you in your mission. At T4 Franchises we make sure that the links with the franchiser are established in the safest way possible. Opening a business has never been so easy.