What are the advantages of franchises

If you are an entrepreneur and want to start your own business but do not have the resources and / or sufficient skills to do so, joining a franchise can be a very good option. This business concept, increasingly common, has become one of the banners of commercial exploitation. Thanks to the power of the franchise you can share the great responsibilities that businesses have and have the legal, communicative, resourceful and motivating support to be able to continue with your commercial project.

If you want to know what are the advantages of franchises, be sure to read the following article. In .com we give you the necessary information to open your franchise ensuring success. Analyze if this business model is the most convenient for you and ... Take out the entrepreneur inside you!

What is a franchise

A franchise is one of the most current business models. It is a system in which the initial entrepreneur tasted the success in the exploitation of his business and decides to grant licenses in order that the franchisees - or new entrepreneurs - can reproduce, exactly, the format of their commercial project, as well as its brand and its values.

The birth of the franchise, as a modern concept, dates back to the First World War, when many American companies decided to expand and develop at great levels. However, the great revolution of this business format came hand in hand with the well-known chain McDonald's, a true empire worldwide.

Advantages of franchises

The franchise system has already been consolidated worldwide. There are multiple advantages that have led them to be one of the best options when opening a business, as it is a demanding, efficient and modern model. Some of the advantages that have contributed to its success are:

Greater possibility of growth and expansion quickly.

The risks of the own enterprise are compensated with the network of the multinational, which offers you better administrative and resource possibilities, while reducing the risk of starting your own business.

Being a business that has been previously developed, entrepreneurship and the direction of economic objectives are easier.

The mother company offers you the knowledge so that the business will prosper optimally and successfully.

Belonging to a chain or brand makes the consumer identify and know your business beforehand. The hole in the market is already done previously. The brand has previously developed its prestige.

It is easier and faster to recover the initial investment, taking into account that the development occurs effectively in a shorter time.

It is more difficult for the business to stagnate, given that belonging to a chain the updating and renewal of the products are continuous, to keep growing.

It is much easier to conduct market studies and know which target the franchise is targeting, given that it has been previously thought by the franchisor.

Your previous experience does not matter. The business is already assembled, you just have to commit to its optimal development.

Disadvantages of the franchises

Although there are many positive aspects that can allow you to open a business through a franchise, you should also know the inconveniences that this may cause, only then you can make a decision consistent and appropriate to your business and entrepreneurial needs. Here are some of these disadvantages:

Sometimes the cost of opening a franchise can be somewhat high, since there are certain clauses that must be paid (fee for advertising, entry fee and Royalty, among others).

The franchisee must follow certain guidelines and models imposed by the franchisor, although both are independent entities.

The poor image or prestige of the chain or its products can affect the performance and work of the franchise.

The franchisor may terminate the contract at any time, in addition to determining its duration.

It can happen that the chain does not have enough resources to promote the franchise, at any given moment.

I want to set up a franchise

Once you have assessed the advantages and disadvantages of the franchised business model, you must make a decision. If you consider that you have the resources (material, capital and human), ethics, optimism, entrepreneurial and visionary capacity, patience and enthusiasm, you should only analyze what type of product you want to market and get in contact with the chain that offers the possibility of making franchise contracts.

The advantages of this business model are multiple and it can be a great opportunity to obtain your own business. To help you advise, we have other articles that may be of interest to you such as: