Wondering exactly what entrepreneurs who want to open a franchise in 2020 should know about?
In this guide you’ll learn:
- How much it costs to open a franchise
- What it takes to run a successful franchise
- The traits of a good franchisor
- And lots more…
So if you have plans of opening a franchise in 2020, you will definitely love this guide. Let’s right into it!
What is a Franchise?
We all dream to own our own business one day. In fact, a recent survey conducted by the United Parcel Service (UPS) shows that:
The survey also revealed that most hesitate to do so out of the fear of failure. And this has been a major concern for many.
There’s one specific type of business model that has come to solve this problem, to give young entrepreneurs a leg up on their own success, and that is franchising!
A franchise is an authorization granted by a government or another company to an individual or group that enables them to carry out specified commercial activities like acting as an agent for a company’s product.
Franchises are like the most common business models!
We witness them in our everyday life. It’s almost impossible to drive more than a few blocks in most cities without seeing a franchise business.
Some common franchise business models you are conversant with are McDonald’s, UPS, Subway, H&R Block, etc.
Franchise business opportunities in the United States are available across a wide variety of industries.
There are over 733,000 franchise businesses in the United States contributing over $800billion to the economy and employing nearly 8million people.
Franchising is indeed a booming industry and something that entrepreneurs should consider diving into.
Why Open a Franchise?
Here are a few more reasons to encourage entrepreneurs to open a franchise in 2020 to do so quickly:
1. Establishing a good reputation
Franchising helps you to build a good reputation quickly as a startup business.
Entrepreneurs have the advantage of joining a well-known business that has already built reliability with customers.
Customers will recognize the well-known business identity such as their brand logo which represents decades of trusted reputation.
2. Built-in Assets
Opening a franchise business means having already built-in assets and resources to set you up for success. Franchise businesses can take advantage of advertising and marketing efforts while also doing their own promotion within their community.
Most companies offer education and training for business franchises to learn the processes and skills needed to successfully run a business.
So, for all the entrepreneurs who are planning to open a franchise, you’re advised to look for a company that offers a mix of online and off/in-person intensive training to teach you everything from financials to marketing.
With franchising, you are not alone when starting your own business.
You have the ability to connect and network with other business franchises to learn more about their experiences in the business.
So, if you wish to open a franchise, it’s best to consider one that offers meetings or annual conventions where different business franchises meet regularly to have face-to-face interactions.
4. Ongoing Innovative Ideas and Product Pipeline
As an entrepreneur who wants to open a franchise, you have the opportunity of leveraging from ongoing ideas and products.
Most business franchises have a team dedicated to the development of new products and services to the business.
So you’d not be bothered with the product creation process – your only duty is to learn more about the new products and how to sell them to customers.
What Entrepreneurs Who Want to Open a Franchise in 2020 Should Know
If you’re an entrepreneur, and you’re planning to open a franchise, below are some of the things you must consider:
1. How much it costs
This includes things like the purchase costs, your opening inventory and the amount of working capital needed to break even.
The cost of opening a business franchise varies by both the niche you choose to dive into and the franchise brand you choose within that niche. Start-up costs for a business franchise range from about $50,000 to about $200,000.
Understanding your business franchise start-up cost is crucial, as no entrepreneur wants to run out of money while on the verge of success.
2. What are you passionate about? – Not necessarily what you are good at
When opening a business franchise, you are not going to be doing all the work yourself.
So, if you’re really passionate about smoothies, but you’re not an expert at preparing them, you don’t have to worry – you can hire people to get it done for you.
This also goes for selling the products and making deliveries.
3. What kind of support will your franchisor provide?
One of the hardest things to do when starting a new business is asking for help when things are not going right.
But if you are well aware of the kind of support your franchisor is willing to provide, the process will be much easier.
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It’s also really important to get to know what your franchisor is really like – because not all franchisors are the same!
Research about things like:
- How long has the company been in business
- What’s the company’s average rate of success
- And how long do other business franchises stay on average with the business.
The more you know about your franchisor, the better informed your decisions would be.
4. How much time must you invest in the franchise business?
For entrepreneurs who want to build a franchise business in 2020, it’s really important you understand what’s involved.
There are franchise businesses that require you to work especially hard at a certain period of the year.
5. What it takes to run a successful franchise
When opening a franchise, it’s always good to speak to other franchisees and not necessarily the most successful ones. Ask about things like:
- Key success factors they’ve discovered in their franchise business journey.
- Challenges they’ve experienced and how they overcame it.
- How long it takes to start making a profit.
- If they were to start the business all over again, knowing what they know now, what would they do differently?
- Factors that could lead to the failure of a franchise.
It’s always great to learn from your mistakes, but it’s even better to learn from others so you don’t repeat their mistakes.