The top 10 reasons to invest in a franchise

Why investing in a franchise could be the best business decision you make

If you’ve spent some time investigating businesses for sale, start-ups or investment opportunities, then no doubt franchising has come onto your radar. It’s a popular method for getting into business for yourself, and there are many advantages beyond those listed here. If you have more time, you could take a look at the dozens of franchise-specific articles published on DaltonsBusiness.com. If you’re pressed for time, though, then simply read through this short guide on the top 10 reasons to invest in a franchise.

  1. You’ll own your own business Buying a franchise, of course, means you become your own boss. It’s arguably the fastest way of getting into business for yourself. There are many other routes into self-employment; such as starting a new business from scratch or buying an existing business for sale. But, for thousands of people in the UK every year, investing in a franchise is the quickest and safest way into business ownership. In short, with a franchise, you get to be the boss – and fast!
  • Plenty of support and guidance is on hand when you need it – This is one of the biggest advantages when buying a franchise. And it’s why investing in a franchise is statistically the safest way to get into business for yourself. The franchisor has overcome most of the problems you’ll face in starting and running your new business. What’s more, a good franchisor will provide high levels of training and support to guide you while you establish and grow your franchised business.
  • You could become part of a national or even international brand – Joining a franchised network means you’ll be part of something much bigger. Whether that’s in a newer outfit with just a few fellow franchisees, or an international megabrand like McDonalds, having peers to share your experiences with is invaluable. Lots of business owners suffer from isolation and will tell you it’s lonely at the top. Invest in a franchise, though, and you’ll always have others to lean on for support.
  • You’ll benefit from brand exposure – Getting your name out there is a key objective for any business. Invest in a franchise, though, and the name will already be established. Of course, the level of exposure will depend on the size of the network (just like the McDonalds example above). But, whatever the size of the franchise, somebody has already spent time and money in developing that brand. As a new franchisee, you’ll benefit from those efforts that have gone before you.
  • And you’ll benefit from systems and processes that work – Proven methods in advertising and marketing – as well as that all-important brand exposure – will set you on your way much faster when starting a franchise. But the benefits don’t end there. Unlike starting an independent business of your own, where you have to pioneer things yourself, when you invest in a franchise you’ll tap into an array of resources and proven systems that fast-track your way to profitability and success.
  • Set yourself apart from the rest – Each franchise brand has something unique about them. Something that sets them apart from other businesses. In some cases, that could mean you’ll have rights to a product or service that others can’t get. That gives you a competitive advantage within whatever industry you choose to operate. There is also a consumer advantage when buying from a franchisee, as customers benefit from dealing with a local business owner backed up by a national brand.
  • Accelerated growth – Done correctly, franchising is the ideal way to accelerate the growth in your business. While you, as the franchisee, focus on your individual business, the franchisor will be looking for new ways to grow and excel. They will be actively recruiting more franchisees, which leads to more brand exposure on a national scale. With that comes more resources to invest in the franchise. It is a cyclical effect ­­– and economies of scale – that positively impacts your own business.
  • A safe bet and an (almost) guaranteed return on investment – Select the right franchise opportunity, and you could see a return of your investment in your first year. That’s rare in most business purchases, and almost unheard of in a start-up. Even if it takes a few years to get your money back, investing in a franchise is a pretty secure bet (according to the British Franchise Association and NatWest survey, a mere 1% of franchises close down due to commercial failure each year).  
  • There’s plenty of funding available for franchisees – As you can imagine, for a bank, lending money to a new franchisee is far less risky than lending to an independent start-up. And that means there are lots of funding options available to franchisees, and at good rates of interest too. Bear in mind, though, that a Franchise Agreement will run for a set period of time – whether that’s 5 or 10 years – and, as such, the bank loan can only run in parallel with that franchise term.
  1. Make your money work for you at any time in your life – investing in a franchise used to be the preserve of the more mature amongst us. And it still remains a fantastic option for those in their 50s, 60s – or even older – to prop-up their pension pots with a final flurry into self-employment. But, interestingly, the average age of a franchisee in the UK has dropped over the last few years and, again, according to the bfa and NatWest survey 18% of all franchisees are now under 30.

We hope our list of the top 10 reasons to invest in a franchise has helped you learn more about this buoyant sector. To decide whether starting a franchise is the right option for you, though, there are plenty more franchise guides published on DaltonsBusiness.com.

The top 10 reasons to invest in a franchise