Benefits

Advantages of owning a franchise include:

1. Brand Name: You have the benefit of identification with service marks, trademarks, etc. As consumers we are brand driven. We trust brands we see everywhere , every day. We tend to be loyal to a product or service that is delivered to us consistently.

2. Known product: Customers gravitate towards products that they know. In a franchise, you are part of a growing brand where you benefit from the marketing efforts of not only yourself but also all other franchisees and the franchisor.

3. Proven success: There is comfort in being able to see and understand the success of other people implementing the very same business idea. This is commonly referred to as the operating system. The system has been developed, tested and associated with the trademark. A franchise owner benefits from all of their new ideas and mistakes.

4. Discounted products: Because you're buying from within a franchise, the franchise presents a larger face to the world and can get large-scale discounts that they can then pass on to their franchisees.

5. Advertising: When you're part of a larger organization, you benefit from the larger advertising budget of which you are a part.

6. Support: When you have a franchise, you have a built-in support system. You are in business “for yourself, but not by yourself.” The franchisor and your fellow franchisees want to see you succeed -- for everyone's benefit. The success of the franchisor is based upon the success of existing franchisees.

7. Training: Most franchisors offer training to assist you in start up and ongoing operations. This training may be delivered live or even in a virtual environment.

Consumers believe that when they shop at a brand name store they are buying higher quality products. Branding makes it easier to compete with the well-established, independent operators and also against other franchised chains.

By following the franchise system, the franchisee’s chances of success increase. Many thousands of dollars can be saved by the trial and error and experience of the franchisor. The system is usually predictable. Follow it and you should achieve similar results of other franchisees.

Although the cost of entrance into a franchise system includes a franchise fee, the franchisee will benefit from training, operations manuals, site selection, lease negotiation, store design, construction savings, reduced cost of equipment and other advantages in buying power. The franchisor will often save the franchisee many thousands of dollars by suggesting the most effective initial marketing plans and allowing them to use the technology developed to improve operating systems. Franchisees will also have the support of the franchisor, as a successful, experienced partner of whom they can ask questions, as well as other franchisees.

The franchisee will benefit from the system as they pay an ongoing royalty which will allow the franchisee to benefit from periodic training programs at the regional office, home office or at the franchisee’s location. Through the franchisor’s buying system, the franchisee will usually pay much less than their unaffiliated competitors.

Franchisees also benefit from the purchasing power that comes from joining with others. They benefit from professionally designed point-of-sale marketing material, advertising, grand opening programs and other marketing materials that unaffiliated businesses can never afford. Franchise systems are on the forefront of research and development. They have access to the latest techniques, strategies, test markets, new products and operating systems.

Each franchisee’s spending power is combined with the spending power of all other franchisees in the local market and the rest of the system. This combined spending power, on advertising for example, often enables franchises not only to dominate local markets and established unaffiliated businesses but to also compete effectively against large, established chains.

There are, however, a few disadvantages of franchise ownership. One of the main disadvantages of owning a franchise is a partial loss of independence. If a franchisee can’t live with the franchise agreement, another business should be considered.