Franchising is a bigger business model than ever in the present time. There have been many popular franchise businesses that have been successful in the US. There are some relevant franchise facts that validate the success of a franchise business model.
To give you a better context, let us understand this with an example. One of the franchise businesses that has been doing really well in the past few years is that of an insurance franchise. There are so many people who have turned into entrepreneurs by owning an insurance franchise business.
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Just like an insurance franchise business, there are many other things that the franchise business is capable of bringing. The fact of the matter is that some of the popular products and places that you see today are a part of the global franchises.
If you go to a market and choose any product, there is a decent chance that this product was made by a franchise. It is also very likely that the store that you are browsing is just another franchise. Now that you get the gist of the potential that a franchise business holds, it is time to look at some franchise facts.
1. More Job Creation
One of the most popular franchise facts is that franchising creates more jobs. It is a business model that stays profitable, and open to growth. The franchisors are always looking to hire more and more workers
Since a franchise has a fixed and a successful business system along with consistent products and services, it is highly likely that it will end up attracting more and more customers. To manage more customers, qualified staff is needed.
Over some time, the overall number of franchise establishments is approximately 750,000. These franchise businesses employ somewhere around 8 million. This statistic is huge and reflects how franchise offers more jobs.
2. Empowering Growth
The franchise business owners work for themselves not by themselves. These businesses have the benefit of offering franchisees an established system of success and they are not left alone to figure out how the business should go ahead.
For instance, if you own an auto insurance franchise then you will be working on an established structure and support system that is well proven while making it far riskier than a do-it-yourself thing.
3. Business Support
It does not matter if it is a financially trying time or another crisis, most franchisees are never alone. It is one of the proven franchise facts that being a part of the franchise brand gives franchisees a solid team that they can depend on.
Franchisors can share their best business practices and business techniques with franchisees. Even in the expected economic and societal changes, the franchise business owner is never really alone. They are backed by a strong business network that supports them.
4. Lesser Expenses
The franchise business model benefits from lesser expenses because there is volume buying involved in most cases. The franchisees have the benefit of purchasing resources with a large network that keeps the expenses down.
This is in fact included in the insurance franchise cost. In times when there is a crisis, this is something that can actually make a big difference because it allows businesses to stay competitive.
5. Name Recognition
Another one of the franchise facts is that being a part of a popular franchise brand offers great business recognition. In the hard times too, the name brands have the upper hand when it comes to attracting customers.
Franchise brands are often known in the market because they offer consistent and high-quality products and services. This is something that leads to national and even local confidence in a given product or a service.
6. Training and Support
Yet another franchise fact that makes franchising a good business is that it offers a structured training program that offers the new franchisee a course in how to begin and run a business.
The already going on training programs for managers and employees are another add-on. Other than this, franchisees also have a community for support and idea-sharing.
7. Business Expansion
The franchisees can also finance their own units and the franchisor can also grow without making a major investment. In a franchise business model, there is always an increased chance for everyone involved to experience growth.
Business expansion has no limits and it can reach the sky if efforts are made in a dedicated direction. The overall economic output of franchise establishments in the United States has been 670 Billion USD, as per a Statista report.
8. Proven Operating Concept
Another one the franchise facts is a franchise business model successful is the fact that it is based on a proven operation concept. The franchisee does not have to take any risk and there is a greater opportunity for becoming successful.
More than anything, the franchisee also gets a well-known and accepted business model with an already proven track record. There are operating procedures, well-defined goods and services, and linear advertising involved in the pipeline.
9. Financial Assistance
When you are associated with a well-known franchise company then you can obtain funds easily for development. Moreover, the franchisor also offers useful advice on financial management along with referrals that help in preparing loan applications.
For instance, if you own a health insurance franchise business then you will be supported with figuring out payment plans, supply purchasing, etc. Even though the franchisors offer a share of profits to the franchisees, they get ongoing revenues as royalty.
10. Complete Control
As opposed to the common belief, it is one of the franchise facts that the franchisees have complete control over their franchise outlet. There is definitely an agreement between the franchisor and franchisee that dictates terms of control over operations but this does not mean that there is no autonomy enjoyed by the franchisee.
In fact, the franchisee enjoys a decent over the operations and on the way in which they run their business as well. They can grow the business efficiently.
11. Franchising Cost
Franchising is a business that can be done at a minimal cost. In a fixed amount, the franchisee can run a business which may include many facilities and equipment too.
The franchisee also pays a fee that can be easily tied with a fixed percentage of sales. The common fee for advertising and management can add to a franchisee’s ongoing cost as well.
12. Advertising and Marketing
For a business to become successful, it is important that enough efforts are made to support its advertising and marketing operations. When it comes to the franchise business model, this problem is solved on its own.
You will be partnering with a brand that already has an established base in the market. The advertising and marketing operations are already on full scale and they have already done the work of making your brand successful.
All the successful franchise business owners know that while they have the support of an already famous brand, owning a business can be hard work and also demand a focused entrepreneurial spirit.
Every franchise brand has different requirements but in general, running a successful franchise will need you to build strong organizational and communication skills. You must also have a firm belief in the benefits that a proven business model is capable of offering so that there is high success potential.