A Piece of the Jigsaw: Franchising Can Be the Right Fit for Entrepreneurs

03/04/2018 08:00 | Start a business

Franchising for entrepreneurs

Why is franchising becoming such a popular choice for entrepreneurs just stepping out into the thrilling world of business ownership?

Perhaps it's because starting a franchise is considered a safer route to success. In fact, the British Franchise Association / NatWest Franchise Survey 2015 found that 80% of independent start-up businesses fail within the first two years compared to more than 90% of franchisees that are still trading in the same period. With failure representing only 0.2% of all franchised units, this alone is an overwhelming reason to consider starting a franchise, but there are many more. In case you needed reminding, here are some compelling reasons why franchising is the perfect fit for entrepreneurs.

Proven business model

The most profitable franchises are likely to be well-established with a tried and tested system. This allows you to try out being a business owner with one of the popular franchises without the fear and uncertainty of starting a business from scratch. As a franchisee, youre still your own boss, but you have the safety net of being supported by a bigger company. The franchisor will be committed to helping you because your success is their success, so they are always on hand as and when you need them.

Budget-friendly

With more than 44,000 franchise businesses in the UK, whatever sector or area youre interested in, there will be a franchise available for you. There are also many different franchise opportunities to suit all budgets. You can choose to invest in a small part-time or home-based franchise from as little as £1,000, to popular franchises such as Subway and McDonalds that can cost hundreds of thousands.

And it's not just the franchise fee and ongoing costs you need to take into consideration. Although there is a misconception that franchising is expensive, there are cost savings to be made when you're establishing your new business. When you choose to start an independent company, you may have no choice but to seek advice or specialist support services to help with aspects such as marketing, recruitment and business development. With the inability to be experienced and skilled in all areas of business ownership the obvious solution is to outsource these tasks. Of course, this comes at a cost which doesnt need to be paid for when you invest in a franchise.

Good for the economy

Franchising contributes a whopping £15.1 billion to the UK economy, creating 621,000 jobs, and the benefits impact more than just the lives of franchisors and franchisees. The franchise industry has proven to be pretty recession-proof too. The popularity of franchising has grown substantially over the past decade, even during times of economic instability. In the last ten years, the contribution to the economy has increased by 46%, and the number of jobs created has risen by an enormous 70%. And with over half of franchisees claiming an annual turnover more than £250,000, it's good for your pocket as well.

Flexible

Starting a franchise gives you the opportunity to choose a business model that allows you to achieve the ultimate work/life balance. If you have young children or are nearing retirement, and so dont want the pressure of running a full-time business, there are plenty of part-time franchises for you to consider. Also, if youre tired of the daily commute to work and want to enjoy more freedom and flexibility, a home-based franchise can enable you to be your own boss without leaving the comfort of your living room.

The most profitable franchises understand that their franchisees are their most significant asset and so encouraging flexible working to fit in with personal commitments makes perfect sense. Quality franchisees will be attracted and retained by the promise of being able to strike the right balance between work and home life.

Support

Deciding to start an independent business can be daunting. You're primarily responsible for every aspect of your new venture and for novice business owners this can be a scary concept. And for many, this encapsulates the advantage of joining a franchise. As a franchisee, you get to be the boss while having the support and backing of the franchisor. Becoming part of popular franchises gives you access to a reputable brand, as well as benefiting from the franchisors experience, know-how, and proven business system. Add the marketing and operational support that you gain when you open your franchise, and it's easy to see the appeal.

Network

Its not just the franchisor that can offer support either. The most profitable franchises are full of experienced franchisees who have been there, done that. If you come across any challenges as a franchisee, its very comforting to know that you can reach out and ask for help and guidance from other franchisees from within the network. This epitomises the reasoning behind the famous franchising saying, that as a franchisee youre in business for yourself, but not by yourself. Simply being able to turn to a peer that can help you overcome any obstacles you face is very empowering.

The benefits of starting a franchise are undoubtedly compelling, but it may not be for everyone. For entrepreneurs that have a strong will to do things their way, following someone elses business model may not be a desirable proposition. You must be prepared to sign a franchise agreement, adhere to the rules and obligations set out by the franchisor and work within your agreed territory. Meeting the expectations of being a franchisee can be tough at times.

But with 97% of franchisees reporting profitability in the bfa/NatWest survey and 91% stating that they are satisfied with their franchisor, the statistics speak for themselves. Its certainly easy to see why the franchising jigsaw piece is the perfect fit for many entrepreneurs that want to become their own boss, but with more support and security than going it alone.

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