11 Franchising Tips for 2011

By Jessica Ciniglio

1. Franchises Have A Higher Likelihood of Success Than Other Business Models
Some studies show that franchises have a success rate of approximately 90% as compared to only about 15% for businesses that are started from the ground up. The exact accuracy of these statistics are constantly argued by those in the industry, however, it is only logical that a franchise will be more successful than a ‘ground-up’ business since there is already an established system in place that has worked well in the past and worked well for other franchisees.

2. The Importance of A Proven Business Model
All Franchises have a business model in place designed for optimum productivity and sales. This means a business can be up and running immediately, and eliminates the lengthy time needed to develop the systems and processes, and as they are already in place (tried and tested) it also means you don’t have to go through the normal challenges that often occur when setting them up for the first time.

3. Franchisees Find It Easier to Get Financing
Lenders will often finance the purchase of a franchise more readily than a ground-up business because franchises already have a proven track record of success. Successful franchises are viewed as less of a risk to banks in regards to defaulting on repayments (and if banks consider franchises to be less risky shouldn’t you?). Some franchisors even offer vendor financing to the right franchisee!

4. Franchisors Provide Marketing & Support
The great thing about owning a franchise is that you are in business for yourself but not by yourself. The majority of franchisors offer a huge amount of support, not only with the set up of your franchise, but with all your marketing and ongoing technical needs as well.

5. Buying A Strong Brand
As a franchisee you are essentially purchasing the right to use the trade name, logo and intellectual property of the franchisor. This can be your strongest marketing tool if you choose a franchise with a well known or well trusted brand.

6. Investigate Your Exclusive Territory
Franchisors will only allow a certain amount of franchises to open within a certain geographical region (just check the individual franchise ‘rules’ and make sure you have a big enough/busy enough region before you purchase). You will then be entitled to a certain area that no other franchisee can trade in!

7. Franchisee Comradeship
One aspect of franchising that is not often spoken about is the comradeship between franchisees. This is a great benefit as franchisees can share ideas and offer support amongst themselves without giving away sensitive information to any competitors to the brand. It becomes a powerful tool as franchisees ‘share’ the trials and errors, which means a reduction of costly mistakes for each individual franchisee.

8. Franchisors Provide Real Estate & Construction Assistance
The franchisor will select or help to select the perfect location/piece of real estate for the franchisee which is a big help since the franchisor has experience with what works best for the franchise and often relationships with property managers. The franchisor will also help to construct an appropriate shop front and some fittings etc (often included in the franchise package).

9. Exploit Economies of Scale
Big savings can be made when working closely with the franchisor. This is done by pooling resources and getting the franchisor to ‘buy in bulk’ saving everyone ‘a little bit here and a little bit there’, which really adds up when you own a business!

10. As A Franchisee, You Are Given A Training Programme
The training programmes are one of the most important elements of a franchise package as it gives you the ability to use new technology, learn a new skill (if necessary), manage the financials and manage staff. The ability to do all of this at once is vital and is often the downfall of ‘ground-up’ businesses.

11. As A Franchisee You Have the Flexibility to Wake Up In the Morning And CHOOSE What To Do That Day!
Being a franchisee gives you more freedom and flexibility so you can choose what you do with your days. This gives you a much better quality of life and all without the stress of starting a business from scratch!

Jessica Ciniglio is the marketing co-ordinator for the Australian Franchises directory (one of the highest ranking franchising website in the country). She has had experience with various online franchise advertising in Australia. She has a Bachelors degree in Business with specialisation in Marketing and Franchising. Visit: www.australianfranchises.com.au

1 Comment

  1. franchise review
    May 28, 2012 at 9:07 pm · Reply

    Franchise is a key of any successful business. There are many thing effects when starting a new business so franchise gives best opportunity to build a business with some legal paper agreement. Franchise provides all ideas, all training and all trademarks which help us to make a successful business. Over here nice article written about franchise which may help us.

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