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In the past few years, more and more people have gone into business for themselves. If you want to start a business, then you might be overwhelmed by the sheer amount of options available and the amount of advice out there.
There’s nothing wrong with having a lot of options, but it’s important to know exactly what you’re jumping into when you’re starting a business, especially if you’re investing money into it. One popular option for starting a business is to join a franchise. But what exactly is a franchise and what does running a franchise entail?
What is a Franchise?
The definition of a franchise is simple enough. A franchise involves a license granted by a larger, existing company to an individual to market and trade products in a certain area. Simply put, you are responsible for running a business that is already part of an existing brand.
So what does this mean for the business owner? Depending on the type of franchise, you will either be able to sell an already existing product or service under an established logo and trademark. Or you might be able to manufacture and then sell the products. Or, more commonly, you will be able to manage a business under that brand name.
The business owner is their own boss, so they are responsible for running the business, hiring employees, and so on. However, as part of an established franchise, they will have to follow certain rules and guidelines.
The Benefits of Franchising
The biggest benefit of franchising is that you are able to use an already established brand. People like what they’re familiar with, which means that they are more likely to stick to franchises that they already know.
The guidelines mentioned above might restrict your freedom somewhat, but they also ensure that the products and services are consistent across the franchise. This means that you don’t have to work to earn a good reputation, it comes with the brand.
As part of a franchise, you can start to turn a profit far more quickly than if you had to come up with everything yourself. Even better, there are a vast number of franchises out there, so you can branch out into different industries. For example, you can even set up an estate sales business as part of a franchise.
What to Look Out For
A franchise is a viable and popular business option for good reason, but you do have to look out for the costs of joining a franchise. Often, the business owner has to pay to purchase a slice of the franchise pie, so there’s that element of risk.
Every franchise is different, but you will always have to stick to the guidelines that the larger business sets for you. You’re also on the hook for the other parts of running the business. Some franchises heavily support owners, while others just leave them to it. You will also have to consider the ongoing fees of the franchise.
When starting any business, be sure to count the costs first.
