Benefits of Franchising

Why should I spend money on a franchise when I could start up my own business from scratch?" This is a valid question that I've frequently encountered in my role as a franchise consultant. Some people assume that I'll automatically endorse franchises, but that's not the case. I never suggest that franchising is a one-size-fits-all solution, just as I wouldn't recommend going the independent route to those looking to minimize risk.

The decision to choose between starting a franchise or launching an independent business is highly subjective and hinges on individual aspirations, attitudes, and inclinations. Let's explore three different scenarios that shed light on this choice.

1. Entrepreneurial Spirits: There are individuals who are inherently entrepreneurial, driven by a free spirit and a willingness to take risks. They might prefer to explore an unproven idea rather than a commercially-established opportunity. These individuals often want the freedom to develop their own products or services and devise their sales and marketing strategies. In my experience, such individuals may not be the ideal fit for becoming franchisees. They could feel constrained by the established systems and procedures that underpin a successful franchise. Conforming to the obligations expected of franchisees might be challenging for them.

As independent operators, they may encounter various obstacles that could impede their progress, particularly during economic downturns. However, those who succeed in this path might eventually contribute to the franchise industry, not as franchisees but as franchisors. For them, becoming a franchisor might be a more suitable path.

2. The Cautious Ones: On the opposite end of the spectrum are individuals who are cautious, lacking confidence in their own abilities or business experience. I once met a visitor at a National Franchise Exhibition who was upset because no franchisor would guarantee his success. I explained that personal effort from a franchisee is crucial for achieving a favorable performance in a franchise relationship. However, he remained unimpressed, and it's doubtful whether he had the aptitude for business, be it franchised or otherwise.

3. Ambitious and Prudent: The third group comprises enterprising individuals whose ambitions are balanced with prudence. Their goal is to break free from the ordinary and enter the world of business, but they consider the likelihood of success a critical factor in their decision-making process.

In this context, UK franchising, with its track record of low failure rates, can convincingly claim to offer significant advantages over the standalone business approach. There's no mystery involved; it's all about having a solid business model that expands by effectively training and supporting capable individuals—the franchisees—who aim to replicate a proven formula for success. This replication extends to every aspect of the operation, encompassing equipment, stock, vehicles, administration, sales and marketing, and more. Many franchisors take pride in the comprehensiveness of their packages.

In summary, when the necessary personal qualities are in place, including ambition, diligence, and a willingness to adopt well-established procedures, investing in a franchise can indeed yield a better return than going the standalone route. It can also offer a less stressful lifestyle. Franchises provide a framework and support system that can be a valuable asset to individuals seeking a structured path to business ownership.