[existentialvoyager]

Are Franchises good investments?

[QandAGuy]

Like most business questions, the answer to this one is "it depends." It doesn't have much to do with whether you can figure it out on your own. The value of a franchise lies in the support and benefits they can give you that you would otherwise have to do yourself (and might not want to do). If they are offering you something you really want, it could be worthwhile. For example:Brand awareness/equity - building awareness for your business can be time consuming and expensive. If they already have a well-established name in the business you are getting a leg up. Brand equity means the value people place in the name (i.e. Volvo stands for safety) which can benefit your business by creating an image in their minds before they even call you.Marketing support: coming up with an effective marketing plan with well put together ads and promotions is very challenging. If you get with the right franchise, they may help with this. Not all businesses require such support, however. Operational support: do they run a well known website that funnels leads to franchisees? Can they help you with the management of the details like finance and accounting, hiring/firing people, etc. Product quality/specifications- using a proven formula for products and services can cut out a lot of the learning you would otherwise have to do on your own. Just be sure it is truly something valuable. Real estate and other support regarding assets purchased: have you ever built your own restaurant from the ground up? How do you know what features your delivery trucks really need? You might be just fine if you do know these things, but a good franchise can help you with everything from site selection to finding the right cash registers.But if you just want to be a smal shop in a small market where you can drive the business yourself there probably is no need for all those services. I've known handymen who could keep perfectly busy on their own but sign up for a service like Handyman Connection since they will field all phone calls, manage their schedule, handle billing, etc. Could they do it themselves? Yes. But it frees them up by not doing so and that has value. Determine what value you need from others and then you can see if a franchise is a good option.