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Advantages Of Franchising
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Advantages Of Franchising

Advantages Of Franchising

Franchise Article Author: The Franchise Guide

Franchising is one of the popular business expansion systems in the world today.  It has been around since ancient history but has only recently made its debut in the world market.  Franchising as a business system in the US is very effective because although it accounts for only 8% of the total in retail business, it garners over 40% of the total retail sales.

The success of franchising as a business system can be attributed to several factors.  The first and the most obvious is the brand name.  In today’s consumer market, brand names are worth a lot.  Every year, billions of dollars are spend on advertising and marketing the brand name of companies.  This is because good brand names mean consistency, quality and consumer trust.  With the almost unlimited choices in products and services globalization has brought into the world market, brand names has given consumers the privilege of dependable, quality and consistent products and services.

The second and perhaps the most important is the proven business system a franchise can offer you.  Statistics show that 90% of all start up businesses fails within the first five years of operations.  This is because new business owners have to fight against time, they have to learn so much and do so much to get the business off the ground before they run out of capital.  Add this to the market power of the competition and you will see why only a few makes it past the five year mark.  On the contrary, franchise business gives you the advantage of not having to reinvent the wheel when it comes handling the various aspect of your business from marketing to human resource management, from accounting to distribution.  A proven system will enable you to avoid the traps or mistakes a new business makes.  As a franchisee, you will be given an operations manual which will dictate how you handle your day to day operations.

Of course franchise chains have much greater buying power than single businesses.  This means that you will be able to avail of raw materials and equipments for a much lower price than if you were not in a franchise.  Couple this with the available support system you gain when entering a franchise and you will have an idea of the awesome collective power of a franchise system.  That is why joining a franchise system is like joining a family that in the end your competition is not only competing against you but against a nationwide powerful organization.

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