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Why You Should Buy a Franchise Instead of Starting Your Own Hoping to be your own boss? One franchise expert outlines the plus side of buying a franchise

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The following excerpt is from Rick Grossman's book Franchise Bible. Buy it now.

Very few people have the natural ability or expertise to be efficient at all aspects of running a successful business. That is where the franchisor's experience comes into play.

Franchise organizations offer a structure for launching, operating and growing a business. The operational and marketing procedures—coupled with comprehensive operations manuals and training programs—are designed to enable franchise owners to earn more and spend less time and effort than would be otherwise required to open and operate a similar business on their own.

Related: Considering franchise ownership? Get started now and take this quiz to find your personalized list of franchises that match your lifestyle, interests and budget.

Collaboration among franchisees breeds success

The franchise organization model allows the franchisee to grow under a common brand and share in the benefits of a larger group of business owners. Though each business is independently owned and managed, all franchisees share in the collaborative benefits of the organization through the support and oversight of the franchisor including:

  • Group advertising resources not typically available to small, independent business owners
  • Owning your own business and making day-to-day decisions yourself, guided by the experience of a successful business enterprise
  • The ability to sell products and services to markets that company-owned outlets have difficulty serving because of higher operational costs and lower motivation of employees in company-owned outlets
  • The benefit of recognized and proven service marks, trademarks, proprietary information, patents and/or designs
  • Training from successful business operators
  • A lower risk of failure and/or loss of investments than if you were to start your own business from scratch
  • Being a part of a uniform operation, which means all franchises will share the same interior and exterior physical appearance, the same product, the same service and product quality and overall customer brand awareness
  • Operational support from the franchisor, both before and after launching your business venture, in areas such as financing, accounting, employee training and operational procedures
  • An opportunity to enhance your management abilities within an established business model that you couldn't experience in most employment situations

Franchisors benefit, too (and therefore, so do franchisees)

From the franchisor's perspective, when franchisees collaborate and succeed together, so will the franchisor. This is a circle of symbiotic success that provides the franchisor (and then the franchise) many benefits:

  • Offers the franchisor a method of rapid expansion
  • Spreads the brand messaging and awareness over a large network of franchise owners
  • Taps in to the franchise owner community's "pride of ownership"
  • Allows the franchise owner community to grow due to a duplicable system and support
  • Features increased buying power for goods and services due to higher volume with suppliers
  • Enables new products and services to be developed in the field with more testing and input
  • Provides a steady cash flow to the franchisor to facilitate the overall growth of the system
  • Can fund the brand recognition effort to grow nationally and globally

Think about this for a moment: If the franchisor understands that its franchisees are the heart and soul of their success, and if the franchisees are happy, then they'll generate more revenue. Even more, it will build on that reputation and financial model.

But if the franchisor sees its franchisees merely as cogs in a wheel that deserve no respect, the system ultimately fails—and not because the end product is poor, but because the sales force that's presenting the product to the general public is dissatisfied.

Franchising statistics back up the talk

According to the International Franchise Association's 2023 Franchising Economic Outlook, franchising continues to be an integral part of the US economy. 2023 projections include:

  • Franchising establishments will increase by almost 2%
  • Franchise employment will grow by 3%
  • Total output from franchises will increase by 4.2% to $860.1 billion
  • Franchises' GDP share of the economy will continue to be 3%

In short, the good news is that franchising makes up a significant part of the national economy and presents a statistically better chance for success than other business options.

The freedom factor

Most individuals seek three common elements when choosing a franchised business as a career path:

  1. Flexibility. Flexibility has always been a hot button for entrepreneurs who exchange the stability of a "real job" for the freedom of being their own boss.
  2. Money. Money, or income, is always a factor, but surprisingly, it is seldom the most important. We know many people who have left huge salaries behind, because they were miserable, to pursue the American Dream and launch a business.
  3. Status. Status is an all-encompassing category that includes not only titles and positions, but more importantly, the feeling of purpose one has and being a part of something significant.

Owning a franchise can provide you with all three elements if you operate the business successfully and properly manage your time and resources.

Commit to the right franchisor

It's been said that if you love what you do, you can't help but succeed. There's a lot of truth to this statement. If you can align yourself with a franchise that fits, you'll be much happier, resulting in higher productivity. This is a simple philosophy that's often overlooked. Some franchise organizations have suffered because they lost sight of this reality during the fast growth stages.

As you evaluate franchise organizations, be sure to investigate their commitment to their franchise owners and their future development plans to enable their franchisees to enjoy continued growth and success.

Rick Grossmann

Entrepreneur Leadership Network® VIP

Founder, Author, and Head Coach

Rick has been involved in the franchise industry since 1994. He franchised his first company and grew it to 49 locations in 19 states during the mid to late 1990s. He served as the Chief Executive Officer and primary trainer focusing on franchise owner relations and creating tools and technologies to increase franchisee success.

Rick developed and launched his second franchise organization in 2003. He led this company as the CEO and CMO growing to over 150 locations in less than three years. He developed the high-tech/high-touch franchise recruiting and sales system.

Both companies achieved rankings on Entrepreneur magazine’s Franchise 500 list. During this period, Rick served as a business and marketing consultant to small businesses and multimillion-dollar enterprises. He also consulted with franchise owners and prospective franchisees, franchisors, and companies seeking to franchise around the world.  Franchise Bible Coach has been voted a top franchise development firm in Entrepreneur's 2023 Top Franchise Suppliers ranking.

Rick is the author of Entrepreneur Magazine's Franchise Bible series, and his 9th Edition was released worldwide in April of 2021. He is also a contributing author to Entrepreneur magazine and other industry publications on franchising and business.

He currently heads up the Entrepreneur Franchise Advisors program, serves as an executive coach and strategist for multiple franchise clients, has been voted as one of the Top Global Franchise Influencers consecutively since 2021, and is the co-host of the Franchise Bible Coach Radio Podcast.

 

 

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