StructureEven new entrepreneurs with little or no experience running a business can be successful with a franchise. Franchisees benefit by having access to the franchisors established thriving system that has been in place for a long period of time. Franchisors have spent years modifying and tweaking their system to make it the best it can be. Then they pass along the end result to the franchisees.
The system includes complete information on the products and/or services that are part of the business as well as detailed marketing methods. An overall marketing campaign is typically already in place and the franchisee is provided information on how to market locally.
Further, the franchisor usually has done the background research necessary to determine the best franchise locations. Many times the building and lease agreement are also already in place, leaving less guesswork for potential franchisees.
SupportAdditionally, franchisees are not alone as they start their business or as they venture along. The franchisor presents detailed training to them on how to operate the business which is a major factor in their likelihood of success.
Continuous support is also consistently available to the franchisee. As the franchisee comes across any issues or questions, they have support from the franchisor as well as other franchisees. It is often quite advantageous to have a group of other business operators to exchange information and ideas with.
AwarenessA big positive that is likely to bring success to franchises is that there is already an established customer base. Typically customers recognize the business and know what they are all about.
Franchise Success vs. Small BusinessSome studies show that franchises have a success rate of approximately 90% as compared to only about 15% for businesses that are started from the ground up. The increased probability of success usually far outweighs any initial franchise fee and nominal royalties that are paid monthly.
Generally speaking, as long as franchisees are willing to follow the instructions from the franchisor and take advantage of the support system they should have a very good chance of finding success.