Owning a franchise appears to be a simple way to begin a business with a good possibility of making money; after all, franchise companies tend to have a lot of market appeal, and millions of franchisors are already profiting from the opportunity. It is, in many respects, less risky than establishing a business from scratch with your own idea, but does it genuinely provide you with the opportunity to become independently wealthy? Well, to know that you have to read this article till the end!
The basics of a franchise
Let’s take a quick look at how franchising works. Every brand has its own method of doing things, but the fundamentals are always the same. You’ll pay for the right to create a business with the same name as the “parent” business and/or sell the same items and services. Most brands require you to adhere to specific standards regarding locations, pricing, and hiring, but once the business is established, you’ll have a say in ongoing administration and decision-making, as well as a share of the profits earned by that location.
How does a franchise work?
A franchisor pays a fee to “rent” the brand name of a franchised firm. The franchisee is responsible for running the business (or hiring someone to do so) and adhering to the brand’s rules and regulations.
Many McDonald’s outlets, for example, are franchises, which means that an owner (or, in some circumstances, a group of owners) pays McDonald’s to use their brand image, menus, trademarks, and other business assets. They run their business, pay McDonald’s for the right to use their name, and keep the rest of the earnings.
A franchise business is appealing because it provides owners with the best of both worlds: the endorsement of a renowned brand and the advantages of owning a business. Establishing a franchise is a serious undertaking, thus it is important for you to outweigh the benefits and drawbacks before embarking on the journey.
What are the 4 benefits of owning a franchise?
You get more control over your life and your money when you start a business. However, owning a franchise has distinct advantages over starting your own business. So, let’s explore the top benefits of starting a franchise over a business:
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More Assistance
You can compare starting a franchise with playing a video game on easy mode. Typically, the franchisor provides training, documents, process flows, and branding to make it much easier to get your business off the grounds.
For example, starting a cafe could take months for making a cafe’s menu, taste testing, logo design, and product procurement. However, when you take the franchise of a renowned cafe such as Starbucks, then most of the pre-requisites are already done.
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Lower chances of failure
Franchises have a lower failure rate than other types of enterprises. When you invest in a franchise, you’re joining a proven and established business model. You also have access to additional support and business resources that can help you succeed. Thus, as a franchise owner, you are at a great benefit with fewer possibilities of failure.
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Built-in brand awareness
Unarguably, building a brand is the most amazing thing that one can do for a business. However, it frequently necessitates the expenditure of time and resources. However, when you buy a franchise, the branding is already done. People are already familiar with your brand and what it stands for. This saves you time and gives you access to an existing customer base.
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Better buying power
In some situations, you may be able to get a better deal on things. Many franchise owners negotiate vendor contracts for the whole network, allowing you to buy in bulk and save money on goods and services. However, the flip side of these advantages is that you may not be able to choose your providers, and the expenses may be higher.
Every coin has two sides, and so does a franchise business. While there are numerous advantages to owning a franchise business, there are some disadvantages to consider. You’ll have to pay business licensing costs, which can cut into your revenues. You’ll also lose control over certain aspects of your business. For instance, if you own a franchise cafe, you will have limited control over the menu or the vendors you use. However, you can overlook these disadvantages against the benefits provided.
How ReferLoan can help in owning a franchise with zero investment?
We at ReferLoan are helping aspiring business minds to own a franchise with zero investment. With our business loan, you can easily embark on your journey of owning a franchise in a hassle-free manner. Our fully-digital platform is partnered with more than 175 banks & NFCs. Also, we have 345+ financial products that you may avail pick according to your needs.
We take pride in working with complete transparency and provide full support to our customers. Moreover, our loan disbursement is much faster and requires very minimal documentation so that you don’t have to hold back for a long time for Loan approval. For owning our franchise you need to fulfill the following criterion:
- Must have an office with a minimum of 100 sq. ft.
- A team of 5 to 20 people.
- Existing DSA running a business in 2 – 3 Verticals.
- Must know the basics of e-mail and excel.
- Bankers who want to start their own business.
- Professionals such as Chartered Accountant, Company Secretary, Advocate, Cost and work accountant or can be Self-employed too.
In near future, our company aims to have a vision of establishing 10,000+ branches on the franchise model in India. Our journey has begun on a great note and we are sure that your presence on this journey will make it worthwhile. Follow us and get on board with us today to avail of the greatest benefits awaiting on the bay!