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Business format franchising offers individuals the following advantages:
A turnkey Business
Franchising makes it possible to quickly start up a new business based on a proven trademark and formula of doing business, eliminating the extensive risk and effort required to build a new business and brand from scratch.
Lower failure rate:
The purchase of a franchise entails the purchase of an established concept that has been proven successful. Statistics show that franchisees stand a much better chance of success than people who start independent businesses; independent businesses stand a 70 to 80 percent chance of failing in the first few critical years, while franchisees stand an 80 percent chance of surviving.
Easier access to credit:
Banks are more likely to extend credit for the purchase of a franchise than for the launch of a new business. An established franchisor may even help its franchisees secure funding.
Support:
Franchisees enjoy invaluable assistance in the form of training, mentoring and ongoing support, and help with statutory requirements and troubleshooting. Some franchisors also help with site selection, lease negotiation and more. Small business owners often have very little support or lack a support team with business acumen!
Brand name:
Franchisees’ operations are typically supported by national advertising campaigns and a solid trading name. Large, well-established franchise operations already have market awareness and brand name recognition. This can amount to great savings in customer acquisition costs and allow franchisees to concentrate more time on the operation of their business.
Lower inventory prices:
The collective buying power of a franchise group allows for lower costs in purchasing inventory and equipment. Independent businesses usually have less bargaining power with suppliers.
Customer confidence:
Customers trust that the individual locations of a franchise network to offer reliably good value and service.
A peer network:
Franchisees enjoy the opportunity to share their challenges and seek advice from other like-minded entrepreneurs within their franchise system.
Easier staff recruiting:
Finding good employees is a critical success factor for many independent small business owners. A franchise business with a recognized name will have greater recruiting pull than an unknown business entity.
Professional development:
British Franchise Association member-franchisors typically offer their franchisees comprehensive training programmes in sales and other business skills.
Individual
rewards, collective support:
Franchising offers individuals the opportunity to be in business for themselves, but not by themselves.
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