Why Franchise?

The franchising concept: what are the advantages?

Potential franchisees sometimes wonder if franchising is a necessary process, and may ask why they couldn’t simply go out and start a business independently.

The findings of the International Franchise Association, a membership organization of franchisors, franchisees and suppliers, suggest that franchisees enjoy a significant competitive edge over the stand-alone business operators.

They noted a study showing that 86% of franchise companies which opened in the previous five years were still in business under the same owner and only 3% of these businesses failed.

Conversely, a US Small Business Administration (SBA) Survey in that same article showed 62.2% percent of all new businesses started over a 10 year period dissolved within their first six years.

The percentages of success may vary with the study and while not all studies may reach the same conclusion most suggest that the franchised businesses are given a higher chance of success than independent, start-alone businesses. Reasons contributing to this include:

1. A franchise is a “duplicate” of an already successful business. The real value of a franchise is the experience, know-how, and the operating plan that comes with it.
2. With franchising, there is the value added advantage of name-brand recognition and a network of support.
3. Franchisees avoid the costly trial-and-error period that causes so many start-up businesses to fail.

For more information please contact our franchise specialists at (888)794-ACFN (2236).