Franchising

You may wonder why so many people choose franchises over traditional, independent businesses and whether franchises make good sense. In many ways, they do offer an effective alternative to independent start-up businesses that can mean a better rate of success. They generally offer less risk and a faster way to establish a new business. Here's why franchises make good sense to business owners.

A franchise, unlike an independent business, comes with business training that can shave years off the learning curve of any business. While other new business owners struggle just to learn the ropes and figure out what to sell and who to sell it to, a franchise owner is given all of the relevant information as soon as the franchise is purchased. Many also come with in-depth training that is conducted in person. Some franchise companies even dispatch a trainer to your new business to help you get started.

Franchises make good sense because they use a business mode that has already been tested and proven to be successful. The business that the franchisee buys is one that has had a proven record of success. That success is generally what creates the idea of expanding the business as a franchise. According to American Express, the rate of successes after five years among independent businesses is just 23 percent. The rate of success after five years among franchises is 92 percent. That's an enormous difference in the amount of risk that franchise owners face.

Franchises come with an instant awareness on the part of potential customers. In many cases, they come with enough name recognition to get the business recognized as soon as it opens. Everyone knows what Jenny Craig and Little Caesars do. Other franchises have name recognition in certain regions or within specific industries. With a franchise business, that name recognition leads to faster consumer awareness. Customers know exactly what to expect when they see your business because every franchise of that business follows the company rules to ensure quality and consistency.

Franchises make good sense because they create jobs. According to American Express, successful franchise owners are leading the way toward an economic recovery. In 2010 alone, franchise owners are expected to create about 36,000 jobs. Franchises are creating jobs that are badly needed in every area of the country. Everyone who has followed the economic problems over the past few years understands how vital new jobs are to economic recovery. As a franchise owner, you can actually be a part of that solution.

In many cases, franchises make good sense because they come with continual training and expert marketing. Training materials get updated and sent out to franchise owners. Some have yearly training sessions and conferences that give business owners updated sales information and techniques. Most franchises have a continuous marketing campaign that all franchise owners pay into. With that kind of buying power, an effective, national marketing campaign is possible. That represents far more than what one independent business owner could afford to create alone.