Unveiling Truths, Connecting Communities

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Benefits of Investing in a Franchise Over Starting a Business

Benefits of Investing in a Franchise Over Starting a Business
Photo: Unsplash.com

When it comes to starting a new business, you can either become an entrepreneur or a franchisee. Franchising has many benefits over building a new business from the ground up, especially if you want to grow fast even with limited business experience. While you’ll still need to learn the ropes of managing your franchise, consider these four benefits of franchising over starting a business from scratch.

Corporate Support

Franchise owners join a community when they open their location. This means they receive corporate support through training, marketing materials, operational guidance, and administrative support. Some franchisors even help franchisees secure business loans through grants to grow their location.

If you decide to expand, there are often incentives and bonuses for successful franchisees who want to open another location. Becoming a successful entrepreneur doesn’t always have to require going it alone. Instead, you can consider opening multiple franchises, hiring talented managers, and taking a CEO approach that gives you more passive income, a flexible schedule, and the chance to grow your wealth strategically.

Brand Equity

Brand equity is the commercial value behind a name. It’s what makes customers choose locations like McDonald’s, Dunkin’ Donuts, and Starbucks anywhere they see one simply because they have come to value the company behind the name.

Business owners who go the entrepreneurial route have to build their equity from the ground up, which is especially challenging if your competitors already have a large market share.

When it comes to franchise brand equity, you can expect customers to already know what they want when they walk through the door. Furthermore, the established brand standards make it easier for you to provide the level of service and quality customers have come to associate with your brand.

Franchising allows you to inherit the equity of your brand to drive traffic and revenue right off the bat.

Lower Cost of Entry

It may seem like franchising is extremely expensive, but the all-inclusive packages most franchisees receive are far more affordable in the long term than opening a business on your own. While you will still have many out-of-pocket costs to cover, it is often easier to get financing and funding assistance with a franchise than by yourself.

The overall lower cost of entry also means franchisees can typically begin earning a high income much faster. It typically takes one to two years for a franchise to break even. There are several factors that will influence your cash flows, including location, the franchise’s popularity in your area, the type of industry you’re in, and your initial investment amount.

Market Demand

Successful franchises are strategic about where they open and operate. This means that you will be able to open a location that has demonstrated interest. Rather than having to assess the market alone and hope for the best, franchisees get direct support from corporations to ensure their location is successful.

Coupled with brand equity, existing market demand in your industry can help your franchise thrive within its first year or two.


Published by: Khy Talara


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