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The Special Opportunity that Franchising Represents

The Special Opportunity that Franchising Represents


Being an entrepreneur is the hot thing nowadays. The incredible success of startups in Silicon Valley by people who dropped out of school or quit their old jobs has led lots of other people to believe that they can do the same. The problem is, reality sets in when you're actually owning the business - it's freaking hard! It requires very long work weeks, there's a ton of stress involved, and you're basically living in poverty until the business turns a profit. These new business owners will sometimes romanticize their struggle, but make no mistake: trying to strike out on your own is a lot harder than it looks.

 

Conversely, being an ordinary worker who reports to somebody else carries its own set of downsides. Sure, it's stable and predictable, but you're unlikely to get anywhere significant. Plus, you aren't ever going to get rich by working for somebody else. While some people are content with being a cog in the machine, others want more out of life. Whether it's a greater earning potential, the freedom to set their own hours, or even just to get away from a bad boss, owning a business offers the potential to have all of the above...or none of it, if the business goes under.

What if we told you that there was a third way? A way in which you could be a business owner of sorts, but operating under the safety and guise of a well-established company. If that's exactly what you want, then franchising is the answer. When deciding what career moves to make, franchising is often overlooked as an option. The point of this article is to show you that franchising can actually be quite worthwhile if done right. Franchisees have an overall higher success rate than fully independent business owners, and they earn more than the average worker.

For starters, franchisors already have things figured out. When you open a business for the very first time, you are truly starting from scratch. You have no established operational procedures, no method of training new employees, no established brand name, no initial income, and no support if business takes a turn for the worse. Franchising lets you be the owner of your own store without having to take most of the initial risks. This is a big part of why franchisees do so well in the long run - most independent businesses fail within the first year, and having your groundwork laid out for you makes a huge difference.

Another point to consider is that the barriers for entry are typically quite low. The only exception to this is that of restaurant franchises, but the startup costs for these types of businesses will be high regardless. Most franchises only cost around 20-30,000 dollars to open, which isn't too expensive when compared with the cost of opening up an independent business. On top of that, your parent company will often help you cover the initial startup costs, such as rent, labor, and initial stocking.

This leads us to our next point - economy of scale. When franchisees purchase goods, they are doing so under the umbrella of their parent company. Depending on how large the franchisor is, you may be able to get a reduced cost on some of your raw goods. These discounts are not available to independent business, and it often explains why their goods and services cost more. Large companies have figured out the ways to get the lowest prices on most of your materials, which allows you to price your goods more competitively.

Ultimately, you know what you want out of life. Franchising is a great opportunity for people looking to strike out on their own with some support along the way, but not everybody is looking for that specific mixture of ingredients. If you're content with being a worker, that's perfectly fine. If you're looking for true independence and the potential for unlimited riches, then being your own business owner works too. Just don't forget that franchising offers a lot that neither of the aforementioned two paths can provide.

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The concept of business coaching, as it is widely known today, was pioneered in 1993 by founder of ActionCOACH Brad Sugars. More than two decades later, the company that started it all is still on top. In fact, no franchise in the “business coaching” category is 10% of our size in total revenues.

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