Is Owning a Franchise Right for You?
Whereas starting an independent business can come with a lot of unknowns and unpredictable legwork, a franchise provides the backing of a successful model that is already established for you. And while franchise businesses are statistically more likely to succeed, they still require a lot of work and ask that you be willing to follow a pre-written set of guidelines.
Owning a franchise is a great opportunity for aspiring entrepreneurs who don't want to start a business from scratch — but is it for you? Here's what to consider.
The benefits of owning a franchise
Whether or not you already have a particular franchise in mind, there are many positive attributes that they share across industries.
- Easier startupArguably the most difficult part of owning a business is in getting it off the ground, which includes writing a business plan, conducting market research, creating a winning product or service, site selection, and more. When you become a franchisee, most of the startup work is already done. Now, it is up to you to apply the system and principles the brand has outlined to your own business.
- Brand name recognition
Owning a franchise allows you to capitalize and build your business on a name that people already know and trust. Getting customers to recognize a brand takes a long time, but a franchise like Tide Cleaners is well-known around the globe before you even open your business’s doors. The value of franchising with a household name brand cannot be overstated.
- TrainingA major part of what makes a franchise successful is its easily replicable system, which includes training employees at every location in how the business should run. The right franchisor is fully committed to preparing you for success. As the franchise owner, you can expect to learn about the operational requirements of the business, sales and marketing strategies, branding guidelines, financial management techniques, staff development and teamwork, and customer satisfaction. All these things are aimed to reduce the number of mistakes that any conventional non-franchise startup usually experiences.
- Marketing support
When you become a franchise owner, the brand you partner with is equally invested in your success, and they will apply their expertise and power to promote your business at every level. You will receive input on how to craft and execute effective campaigns of your own, as well. The franchisor may provide a marketing plan that covers a market analysis, sales forecast, and budget to help you to advertise most effectively.
- Buying power
An obvious advantage to becoming a franchise owner with an established brand is the access to increased buying power. The franchise may buy large amounts of inventory and equipment on behalf of their franchisees, meaning you will obtain these essential assets at a reduced cost. As a subsidiary of Procter & Gamble, a titan of household names, Tide Cleaners franchisees will benefit from the immense resources of a name that operates in a plentitude of industries.
- Path to financingOne of the biggest barriers to starting your own business is the startup cost. Whether independent or franchise, this can be an intimidating endeavor. Seeking financing is a common need for new business owners, regardless of the type of operation they are undertaking. SBA loans, in particular, are considered the gold standard in business loans, but they require meeting strict eligibility requirements. Because the SBA reserves a portion of their loan allotment specifically for franchises, however, you may have an easier time qualifying than if you were to seek an SBA microloan for starting up an independent business.
- Exclusive territory
When you buy a franchise, you are usually also buying an exclusive or protected territory to do business. Franchisors only allow a certain number of franchises to be open within a specified geographical region. You will usually be entitled to a certain area, and no other franchises (within your franchise system) can operate within that area.
- Own multiple locationsBeing a part of a franchise system can offer you more opportunities to grow within the system. Once you have become a successful single-unit franchise owner, you may have the opportunity to become a multi-unit franchise owner.
Potential drawbacks to owning a franchise
While full of advantages, owning a franchise isn’t for everyone. Before investing, consider whether you may deem any of the following to be deal-breakers.
- Following a set model
While franchise owners are still very much their own bosses, you will still be required to follow the guidelines and operational procedures laid out by your franchisor. It is important that you choose a franchisor whose goals and values align with your own to help foster a symbiotic professional relationship.
- Startup costs
Some franchisors require a markedly higher initial investment than you would consider spending to start your own independent business. Bear in mind, however, that these price tags clearly outline where your money is getting spent, and there will be no unforeseen surprises to trip you up. And as previously mentioned, the financing options are more advantageous with a franchise venture.
When you buy into a franchise, you become intrinsically linked to the overall reputation of the brand, for better or worse. No matter how well-run, efficient, and successful your specific branch may be, your business is still tied to the national or global franchise name. If a scandal befalls the brand or another franchisee gets bad publicity, your business may be affected. Alternately, you will naturally benefit from the good name and positive publicity a brand receives.
New franchise owners are required to sign a Franchise Disclosure Agreement (FDA), which lists all of the rules, obligations, and guidelines specific to a brand. This is a legally binding contract that you will be compelled to uphold. This arrangement may feel restrictive to some entrepreneurs but ultimately is to the benefit of both the franchisor and franchisee — in that it protects everyone’s interests.
Consider franchising with Tide Cleaners
The decision to become a franchisee comes with many of the same considerations as starting any other business — it requires an entrepreneurial spirit, an innovative business mind, and a tenacious attitude. Franchising provides the tools and support that many independent ventures struggle to nail down.
Consistently ranked #1 in its category by Entrepreneur magazine and others, Tide Cleaners is excited to welcome new franchise owners to become a part of our internationally beloved brand.