Becoming a business owner | 7 min read
Becoming your own boss is a big decision. And deciding whether to buy an existing business or a franchise can make the choice even harder.
We got the inside word from a number of franchise experts to discover why franchises are a good business move.
Here are their top ten reasons why buying a franchise could be the right option for you.
1. It’s a growing sector – there’s a franchise out there for everyone
With over 1,160 business format franchisors in Australia1, a potential franchisee has plenty of options to choose from.
Some have higher barriers to entry, and some have almost none at all. You’re spoilt for choice…whether you want to groom dogs, sell hot dogs, or run a service station, there’s likely to be a franchise that’s the right fit for you.
2. You’re buying a proven formula – a lot of the hard work is already done
Mary Aldred, CEO of the Franchise Council of Australia (FCA), says you don’t have to build your own business model, “you’re buying a proven system and way of doing things”.
The franchisor has already worked out the pitfalls, and created a solid foundation that can easily be rolled out. You’ll get guidance with everything from marketing and products to site selection and vendors, helping eliminate any guesswork or potential errors you might otherwise face.
Stephen Giles, a lawyer with expertise in franchising from Norton Rose Fulbright, says your odds of success are good if you’re buying a franchise that has a proven track record.
“If a franchise has more than 25 outlets and has been going for more than five years, the system is likely to be sound.”
3. There’s built in support – help is just a phone call away
A franchise comes with plenty of support – both initial training and ongoing assistance. “You’re going into business for yourself, but not by yourself,” says Carly Mackay, Franchise Development Manager at Bakers Delight.
This built in support system means you can always pick up the phone and get the help you need. Franchisors often look after branding, vendors, advertising and marketing, and bring the buying power of an established network. Suppliers, software systems, products, price points, and accounting processes are often part of the package, too. You not only get backing from head office, but you can also establish relationships with other franchisees who’ll help you run your business more effectively.
“Being in a franchise system means you have plenty of support behind you to help with your success. There are many systems and processes in place to set you up for success, rather than going at it alone,” says Carly.
4. Brand power – people already know what your business can offer them
What could be better than starting a business with a brand that customers already recognise?
“Our franchisees start with a really strong brand that people love,” says Nicola Swarbrick, Head of Growth for Donut King Mobile.
In the consumer’s mind, brand often equates to reputation. So joining a reputable, established franchise with a strong corporate image means your customer base already knows you. You benefit from the knowledge and familiarity people have of a successful brand.
That brand strength makes it easier to develop enduring connections with customers and clients. In their eyes, you’re already the real deal. “You start a business with immediate credibility…and you can quickly build really strong relationships with your customers,” says Nicola.
5. You can still be your own boss –you get independence and support
Being a franchisee is different to starting your own company, or purchasing an existing small business – but that doesn’t mean you don’t get to make decisions. You manage the schedule, and you run the show. Just understand that there is a hierarchy. If you follow the formula and systems of the franchise, your odds of success increase.
John Prasad owns three mobile coffee and food trucks in Western Melbourne, and values the balance he has. “I love the support of a franchise…and it’s an excellent opportunity for you to walk by yourself and control your own destiny.”
Mary Aldred from the FCA says a lot of people are attracted to the support a franchise offers, coupled with the independence they get as a business owner. “You’re working as part of a team. While you own your business, you’re not doing it on your own.”
6. You’ll receive thorough training –you don’t have to figure out everything on your own
You’ll be fully inducted, learning everything you need to know before you get the keys. You’ll learn about important policies, budgeting, and receive vital on-the-job training. This preparation helps set you up for success, and ensures you’re running your business efficiently. In turn, you’re less likely to make the mistakes many new business owners make.
“[Bakers Delight] training programs really set you up to be competent in running a small business,” says Carly. “And we offer ongoing training so you’re continually learning and growing professionally.”
This continuous training and process updating has another benefit. Good franchises will innovate, and work hard to stay ahead of the game. That means they’ll train you in best practice without you having to spend time and energy trying to figure it out yourself.
7. You get a head start – you don’t have to do all the groundwork
Having a strong name attached to your products and services will help you get your business off the ground. Using a tried and tested formula means you can focus on building your business, giving you a head start. While your franchise is your responsibility, most franchisors are committed to seeing you succeed. They’ll offer advice where needed – including ways to improve sales, and cut costs.
“Franchisors will already have existing relationships and networks in place,” says Nicola. Many will offer guaranteed business, or give you exclusive access to leads or business in a specific geographic area. The hardest part of starting a business – getting set up – is partly done already. It’s an order of magnitude easier than starting a business yourself.
8. Minimised risk – it’s tried and tested, and the business model is sound
Having a wealth of experience behind you significantly increases your chances of success. With a franchise what you’re really investing in is the proven concept and security of being part of a network. While there’s never a guarantee of success, having the backing of an experienced brand with a proven system can create something of a shortcut to establishing a prosperous business.
“Franchise brands have operated in their field for a period of time,” says Mary. “You’re not starting from scratch wondering if something will absolutely sink.”
Franchises’ bookkeeping is often more reliable, too, meaning you can see precise figures and cross-check them with other franchises to see how your business is likely to stack up. That leaves you time to more accurately analyse other core components of the business.
“[Franchise] issues will relate more to local market competition and the skills and experience of the operator,” Stephen from Norton Rose Fulbright shares. In other words, you can probably trust the numbers. If they look good, you just have to decide if the location, price, and prospective owner (you!) are the right fit.
9. You can choose a franchise that suits you – whatever your lifestyle goals may be
With so many different franchises to choose from, there’s probably something out there that will meet your needs, even if they’re very specific. Maybe you’re looking for a business where your whole family can be involved. Perhaps you want to work only Monday to Friday, would like a home office, or want to follow your passion…you can choose the franchise that accommodates your needs best.
10. You’re not alone – there’s always someone there to help you through the tough bits
Starting a business can be intimidating. But with a franchise you don’t have to do it alone. The best franchisors are just a call away, and many have local managers on hand to give advice. Being able to tap into the knowledge of other franchisees can also be invaluable as you set out on your business journey. Because your success is also the success of the franchise, you’re surrounded by a support system from the moment you start.
“Running a small business can be a lonely and at times daunting journey. One of the things franchisees say to me is that knowing they have their franchisor there for support is a huge bonus,” says Mary.
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1 Asia Pacific Centre for Franchising Excellence