Around the country there are over 3,000 different franchise companies in over 300 business categories.
As rewarding as it can be to buy into an established franchise, there are a few things to consider first. Here is a list of seven significant pros and cons to help you decide if this is the right type of business opportunity and investment for you.
- Your reputation relies upon that of the franchiser
- Start-up costs and royalty payments
- Limited creativity and flexibility
- >Marketing fees and contracted suppliers
- False expectations
- Restrictive guidelines
- Possibility of inadequate support
- A framework for success
- An established brand and customer base
- Financial Assistance
- Access to R&D and new products
- Provided marketing materials and supplier list
- Work for yourself
- Low risk
It may not matter how well-managed your particular location is if the brand has a bad reputation or is involved in a public affairs nightmare. Your customers will view every location the same.
There can be a high initial investment (average is $250,000 plus real estate) and royalty payments range from 3-5 percent of monthly gross sales.
You will need to strictly follow the set business model and won’t have the flexibility to be creative or the authorization to make policy changes.
You’ll need to pay fees for your local marketing campaign materials. Also, you don’t have a choice in suppliers, as they are approved and contracted by the franchiser.
If you don’t do enough research, you may see yourself stuck in a long-term contract with a company that doesn’t fit your ideals or suit your needs. There are no guarantees of success and you’ll still need to put a lot of work into running your new business.
You will be required to operate your business by strict guidelines. These rules can cover everything from the prices you charge to the color of your decor. You’ll also be required to share financial information.
Though most franchisers offer plenty of market and field support, there is always the risk that their level of support doesn’t match what you feel you need. In the end, the success of your franchise rests solely with you.
By already having a strong business model and culture in place from the start, you won’t have to work through the trial and error phase of startup. A recognized name will make it easier to recruit qualified staff, and some franchisors provide management and technical training.
Since your brand is already well known by a base of customers, you’ll spend less time attracting new ones, allowing you to immediately focus on making a profit.
In some cases, franchisors may provide loans and other financial assistance to help franchisees with startup costs.
Your franchisee has the motivation and financial capability to research and develop new techniques and products. They also have proprietary methods to which you’ll have access.
Franchises will provide you with all the materials needed for a marketing campaign. With contracted suppliers, you may receive supplies at a price below market value.
You’ll have more freedom and flexibility, allowing a more fulfilling work-life balance. You’ll choose the people who work for and alongside you. You’ll feel the pride of building something of your own and then be able to reap the rewards.
Franchises are a proven business model. A system of profitability has been established. You will get the support you need from your franchisee so you can enjoy your own success.
Learn more about the Bruges Waffles family and why we are one of the nation’s best franchise opportunities. Or, if you’re ready, just go for it!