Why franchises can be better than startups

Whilst starting your own business means owning a bigger slice of the pie, buying a franchise can actually give you something worth eating

Why franchises can be better than startups

A question that potential franchisees often ask is: “Why would I take a franchise and pay to do something I could do myself?” Perhaps the best answer to this is given by the long-running bfa NatWest survey. It has consistently shown that over 90% of franchisees are still in business after two years, whilst in the same period some 80% of startups go under. So you are likely to fail if you start up yourself, whereas you will more than likely succeed if you buy into a recognised franchise. Simples.

In my experience, it is not often the business idea that causes startups to go belly up but the sheer enormity of the task of running the business. Remember, if you start your own business, you would be responsible for absolutely everything, such as sales and marketing, researching and developing new products, sourcing the best suppliers, doing the accounts, chasing debt – the list goes on. In a franchise, the franchisor provides the franchisee with experience, business know-how, operational methods, marketing tools, sales training, procurement advice and, of course, ongoing support. That’s not to mention the provision of a proven business system, trademarks and brand.”

The maxim ‘in business for yourself, not by yourself’ encapsulates the essence of franchising and, because of this, it remains one of the fastest-growing and consistently successful methods for distributing products and services to the marketplace.

There is a quote from Eric G. Flamholtz and Yvonne Randle’s book Growing Pains that really does highlight the benefit of buying a franchise over building a startup. “[Running your own business] is about as easy as navigating unchartered waters in a leaky rowboat with an inexperienced crew while surrounded by a school of sharks. […] The crew might be glad to know that others before them have made the voyage successfully and to hear some of the lessons that the other voyagers learned in the process.” The magic of franchising is that it combines an individual’s own abilities, drive, determination and aspirations with the proven business systems, resources, intellect and ambition of a corporate body.

So, to my mind, there is no argument: franchising reduces the risk of an investment and provides the structure to bring success to people from all walks of life.” /></p>
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ABOUT THE AUTHOR
Nigel Toplis
Nigel Toplis
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