As you consider becoming a small business owner by way of purchasing a franchise, you may wonder how safe of an investment this type of business venture typically is. There are many factors that point to franchising as one of the safest ways to go into business. After all, there is an established system in place for running the business. How can you make sure that the franchise you choose is a safe one?
The International Franchise Association Statistics
The International Franchise Association (IFA), founded in 1960, is a membership organization of franchisors, franchisees, and suppliers. Years ago, the IFA kept statistics on the success of franchises. These studies showed that franchisees had a success rate of 95 percent versus a failure rate of 85 percent for non-franchised businesses. These statistics turned out to be inaccurate. The International Franchise Association has asked all franchise companies to no longer use these statistics because they are incorrect and misleading.Just because the IFA has stopped publishing these franchise success rates does not mean that franchising is not safe. This just proves that buying a franchise is just as risky as any other business you may open.
The Security of Buying a Franchise
There are many individuals that have the ability to run their own business but do not have the resources to get it done. In some cases entrepreneurs cannot find the right financing to start their business or do not have enough experience negotiating lease terms for the perfect location. The franchisor will help you with everything it takes to get your business up and running.Buying a franchise will save you lots of time doing research and branding your company. When you buy into an already established franchise system, the corporate image and brand awareness of the company is already established. In most cases you will not have to earn your customers business since the franchise has already done that through other successful locations.
