Why Buy a Franchise?

Perhaps you are dissatisfied with the way you're being treated by your company. Perhaps you're an executive who has been displaced. You realize that your labors have been creating wealth for others but not for yourself. You've had the idea of owning your own business as a solution to these and other issues but you've heard all the horror stories about the failure rates of independent businesses. A franchise may be the answer for you.

For the franchisee, franchising is about risk reduction and safety. You give up the total freedom associated with being an "independent owner" to become part of a group of people committed to building a brand and dominating markets using a common, tested operating system. You don't have to guess about the most effective way to build your business, because there is a specific system to use.

The franchisor provides a proven method of doing business (the operating system), and a brand or trademark that will have value in the eyes of the customer based on execution of the operating system. Further, the franchisor will provide initial and ongoing support so the franchisee won't have to reinvent the wheel to be successful. The franchisee provides the capital to expand the brand faster than the franchisor could by itself along with the management talent to run the business and execute the operating system.

A franchise system should also provide group buying power to cut your operating expenses, faster growth due to tested marketing programs, predictable results based on your adherence to the operating system and less risk of your invested capital. The tradeoffs for you, the franchisee, are the fees you pay the franchisor for the operating license and the restrictions you will deal with on the method of operating the business. Ask yourself if you would rather own a McDonald's restaurant or an independent burger drive-in. The answer to that question will tell you whether franchising is worth exploring for you.