Most small businesses are set up by people who want to work for themselves, have control over their own destiny and the flexibility to do things their way. But do they actually need to work by themselves?
Franchising offers a proven model that provides a popular, lower-risk alternative to the traditional start-up route. Franchise businesses are four times more likely to succeed than other small businesses and opportunities are increasing as successful UK companies see this route as an effective way to grow.
Franchising is no longer the exclusive domain of the man-with-a-van or the burgerflipper; it now includes professional business-to-business services.
The obvious benefits of buying a franchise are recognised: the business is based on a proven idea; the franchisor provides support (usually in the form of training etc); the franchisee normally has exclusive rights to his or her territory; and it may be easier to raise finance as banks are more likely to lend money to buy a business with a good reputation.
In addition, there is enormous benefit to be had from belonging to a community of non-competing, like-minded individuals. This offers potential for sharing best-practice support from other franchisees.
Naturally, there are risks. The would-be franchisee must do their due diligence. This includes talking to existing franchisees before making an investment. The financial model is critical to ensuring there will be sufficient returns for all parties.
The main downside is that potential returns are not as high as you might have dreamed of getting from alternative start-up businesses. But for those looking for a relatively low-risk investment with a reasonable medium-term return, then it is definitely worth considering buying a franchise.
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