Baskin-Robbins, McDonald’s, and Starbucks, to name a few, are all well-known examples of the franchise business model. If any business model has stood the test of time, it is the franchise model. Franchising contributes to the national economy, and in an unstable economy, it is the franchises that tend to survive and fare better than other businesses.
If you are considering investing in a business and wanting to be a business owner, consider these six reasons why the franchise model—buying a franchise—may be right for you:
1. Franchises are easy to obtain.
Franchises have been called one of the best business models ever created. This is because of their proven success and the comparative ease with which a franchise can be acquired. Nothing has to be started from scratch. All systems, policies, and products are in place; tested, tried, and true. Furthermore, single franchises may be purchased for as little as several thousand dollars to several million. Keep in mind, starting a franchise is quite a different proposition than purchasing an established business, a topic we will cover within another article.
2. Franchises create new jobs.
Franchises provide a significant boost to employment figures. According to ADP Research Institute, American franchise businesses created 52,000 new jobs in October 2016. Due to the success of the franchise model, the number of new franchise opportunities is expected to increase, especially in business services, personal services, and construction industries.
3. Franchises contribute to the economy.
In relation to the above reason the franchise model works so well is that they are the major source of new hires. Apart from that, they add to the national economy by their giant revenue. Their marketing campaigns are sophisticated, yet relatively inexpensive to the franchisee. Franchises tend to become household names without individual franchise owners having to make significant capital investments in marketing and advertising. Novice or busy entrepreneurs find very beneficial the systematic quality of a franchise and any other work that is done at the corporate level and left out of the franchisee’s hands.
4. Franchises have a global reach.
Many franchises are spread in different countries worldwide. It is because of their global reach that they are insulated from an economic meltdown in any one country. For example, McDonald’s may have survived the U.S. economic slump partially due to earning enough revenue from its chain of restaurants in other parts of the world. A local hamburger restaurant, for example, especially an un-established one, would have likely struggled to survive the economic crises when people were spending less and dining out less often. Their global reach also provides a sense of humanitarian spirit to the entrepreneur concerned with helping economies worldwide.
5. Social media presence is a significant factor in franchising.
While many startups and other businesses are still learning the ropes of customer loyalty and fandom on Facebook and other social media outlets, pre-established franchises , due to their ability to afford expensive advertising campaigns, garner thousands of new fans every day. If a Pizza Hut franchise opens in New Jersey, a new social media profile specific to the geographical area is created by the franchise, and within days, it will have a huge following—without the franchisee having to do anything or even know about social media.
6. Franchises may be home-based
If a storefront is not something desirable to a new business owner, there are franchise opportunities specifically for people who want to work from home. They receive all the benefits of a franchise, plus the flexibility of setting their own hours. Companies like iSOLD It @Home offer opportunities to participate in a franchise from the comfort of home. Their operating procedure is fairly simple: Selling overstocked items on eBay by setting up a virtual shop. More and more such home-based franchises are sprouting daily. According to some statistics, one in five Americans works from home, a figure expected to rise by 63 percent by 2021.
At ActionCOACH we offer two franchise models, a home-based “self-employed” Practice for a single coach who has the option to work from a home office, and our “manager-investor” Firm for people looking to build a team of coaches. Learn more about opportunities in Iowa and Nebraska today!