In 2019 and early 2020, the experts were predicting consistent growth in the franchise market. Even during an economic or health crisis, many franchise brands are even thriving, depending on the industry. This is a direct answer for the question: why is franchise important?
Each franchise brand has different requirements but in general, to run a successful franchise you need strong organizational and communications skills, plus a willingness to learn the business. It’s also important to believe in and value the benefits of following a proven model and to embrace the existing system to guarantee the highest potential for success. Buying a franchise is important for the following reasons:
Jobs creation:
In crisis times, while some franchisees have had to reduce their workforce, many were deemed essential businesses, and were able to stay open, remain profitable, and even expand and hire more workers. And, because a franchise has a stable, successful business system and consistent products or services, it’s more likely to continue to attract customers.
Franchise owners are not alone:
Franchise businesses have the advantage of providing franchisees a corporate system of success and are not left alone to figure out what to do on a trial and error basis. They have a structure and support system that is proven to work, making a franchise far less risky than a do-it-yourself endeavor.
Support in crisis times:
Being part of a franchise gives franchisees a solid team they can rely on, share best practices and business techniques to more often weather unexpected economic or societal change better than independent business owners. This is the power of a successful entrepreneurial network!
Lower expenses through volume purchases:
The power of purchasing inventory through a larger network helps franchisees with more opportunities to keep expenses down. And, during a crisis of any kind, this can make a big difference in being able to stay competitive. Franchisees often also have the advantage of new technology and software provided by the franchise brand in order to track their purchasing and order more effectively.
Importance of brand recognition:
Even in hard times, name brands have the upper hand when it comes to attracting customers. Franchise brands are known for consistency and quality, and that results in both national and local confidence in the product or service.
Profitability:
In general, franchises see higher profits than independently established businesses. Most franchises have recognizable brands that bring customers in droves. This popularity results in higher profits. Even franchises that require a high initial investment for the franchise fee see high return on investment.
Be your own boss:
One of the biggest benefits of owning a business is being your own boss. When starting a franchise business, you get to be your own boss with the added benefit of receiving support from the franchise’s knowledge base.
Owning a business is hard work, but when you’re your own boss, you get to create your own schedule, have autonomy over your career, and potentially work from home.
A franchise gives you the benefit of being your own boss without the risk of starting your own independent business.
Like most other business decisions, starting or buying into a franchise has its pros and cons. And not all franchises or franchise relationships are created equally. It’s important to do research before choosing the franchise that’s right for you and to understand all the advantages and disadvantages of franchising that you may come across as either the franchisee or franchisor.