By: Ronya Banks
If you are tired of working for someone else and exploring opening
and running your own small business, you are probably confused about
the multitudes of available business possibilities. To make matters
worse, authoritative voices differ in their opinions of whether
opening a major franchise business is preferable to starting an
independent business.
As an owner of nine franchise businesses, I have personally
experienced the benefits as well as the limitations of opening and
running franchise businesses. The following is a list of pros and
cons of owning a major franchise business.
1. (Pro) Pre-existing building layouts and dÚcor requirements
lesson start-up confusion and facilitate quicker and easier start-
ups.
Many pre-existing franchisors "The Franchise Giver û Big Daddy"
usually equip their new franchisees "You û The Little Fish" with
possible layout and decor drawings and requirement spec sheets, thus
taking the guesswork and hassle out of trying to figure out how you
are going to build-out and equip your new business.
2. (Con) Loss of creative control over business layout and
dÚcor appearance.
The benefit of being told where and how to build and place
everything comes with loss of freedom you may want to express your
creative decorative expression in your business. If you want to
decorate your business with freedom, research the franchise dÚcor
rules and regulations before you purchase a franchise.
3. (Pro) Franchise agreements and structures set up to save
you money on business, service or food products.
Because of the greater number of franchises, "Big Daddy" usually has
arranged cheaper national contracts wherein you can get certain
services, business or food products at a significantly reduced
price. You get to save money.
4. (Con) The products and/or services you provide are
regulated and controlled by "Big Daddy".
These cheaper prices are usually accompanied with regulation and
control by the franchisor as to what type of products and services
you can or cannot purchase. In other words, "Big Daddy" tells you
what you can or cannot buy and from whom.
5. (Pro) National Advertising included.
Well known, established franchises typically have a National
Advertising campaign in place that provides TV, radio, and printed
material advertising. This way, you don't have to spend a lot of
your own money locally advertising your business.
6. (Con) Loss of promotion/advertising freedom.
Great national advertising promotions are typically accompanied by
blanket: "You will promote this product or service during this
campaign" ruling. Hopefully, their advertising campaigns will make
sense, won't cost you too much money, and bring in more business.
Sometimes it works and sometimes it doesn't.
7. (Pro) Name recognition.
Who has not heard of Baskin Robbins, Subway or GNC? If you haven't,
you've been living in a cave. Franchises typically have wonderful
name recognition benefits to them. In other words, people will
actively seek out a particular franchise wherever they go.
8. (Con) Customer holds other franchise experiences against
YOU.
If a customer has had a bad experience at one franchise location, he
tends to hold all of the other franchise owners responsible for that
one bad experience somewhere else. In other words, I'll never go to
another Subway because I didn't like the meatball sub I got at Joe
Blow's location.
9. (Pro) Potential for higher sales.
With the national advertising campaigns and name recognition, your
franchise business has a better potential for much higher sales than
a similar business with a no-name, no experience rating history.
10. (Con) Handing over a percentage of your sales to "Big
Daddy".
Yeah, higher sales! But ouch, you have to hand a large bulk of your
sales over to "Big Daddy". For every dollar you earn, your
franchise fee rips away anywhere from .04ó to .25ó. Pull your
wallet out and hand it over to "Big Daddy".
As with any situation in life, there are resulting pros and cons.
Simply study the nature of the franchises completely and talk to
other franchise owners to get a feel of whether you will want to
purchase that particular franchise. If it's a good fit, go for it!
Good luck and good business!
As a Mind Power Leadership coach, trainer, and speaker, Ronya Banks
has been teaching others how to become leaders and business owners
since 1992. Frequently featured in radio, magazine and newspaper
articles and interviews, Ronya helps people find the great leaders
within by accessing the natural power of their minds. Discover more
of Ronya's proven leadership success secrets at:
www.livinginaction.com or subscribe to her Mind Power Leadership
ezine newsletter at: http://www.livinginaction.com/newsletter.cfm.