• Jason Revere

What are the top 5 reasons to buy a franchise?

Updated: Feb 25


So you want to start a business, eh? Well, that puts you on the verge of taking, what Gino Wickman referred to as the Entrepreneurial “leap”. Congratulations on getting to this point, but you do have some decisions to make, and a lot of tasks to accomplish before earning your first customer and hanging the ceremonial first dollar on the wall.


The first thing you need to decide is whether or not you want to invest in a franchise for your new business. This article will be covering the 5 reasons that make purchasing a franchise appealing to a lot of entrepreneurs. If you decide not to open a franchise, you’ll find more resources on how to walk that path on our blog.


So what are the top 5 reasons people like you invest in a franchise instead of going at it alone?


Well, I’m glad you asked… Here they are (in no particular order)


1. Proven Concept – When starting anything new, there is always some chance that your new idea isn’t going to have the market that you are hoping it will. Starting a business is hard! It requires a lot of work from the owner just to get the doors open. Market research, pricing decisions, advertising, logo creation, website design, and much more. And once you figure all that out, you have to hope that you’re right that your business concept is even viable.


That’s where the franchise comes in. The franchisor has already done all the hard work of starting a new concept. They have proven that there is a market for the product/service. In most cases, all you have to do is work the system and follow the instructions from your franchisor – Oh, and work like crazy!


2. Marketing – The number one reason we’re given when asking franchisees, the reason they chose to open a franchise is marketing assistance. Marketing is the most important component to a companies business plan, and it’s the thing that entrepreneurs struggle the most with. So, it makes sense that most people surveyed self-report that the marketing assistance was the deciding factor in purchasing their franchise.


Most franchisors will have at least a rudimentary grasp on the science and art of advertising their business concept to potential consumers. This grasp is vital to the success of the franchisees business. If the franchisor does in fact have a grasp on the marketing plan, the franchisee will accelerate their growth exponentially faster than they would had they started their business from scratch.


3. Training – The average college education costs around $100,000, while the average franchise fee is roughly $35,000. And, I guarantee you’ll learn more during your initial franchise training than you would from any 4 year college. Sure, you won’t learn about Nietzsche, or Freud, but you will learn how to generate cash flow, and how to operate a sustainable, scalable business.


This initial training period is extremely valuable. You will learn the secrets to running a successful business that took decades of trial and error to learn, and it will only take a week or two. The average salary for a college graduate is $50,000 – some franchise brands boast upwards of $8.5 million in gross sales with EBIDTA numbers exceeding 18%. You do the math on that… (OK, I’ll do it for you – That’s $1,530,000). Which scenario sounds more appealing to you?


4. Buying Power – This is a popular term uttered by prospective franchise buyers. They all believe that it’s the franchisors responsibility to negotiate some discounted rates on products that the group of franchised locations purchase on a national level. Well, they’re right! The franchisor should constantly be working behind the scenes to negotiate better rates on the products necessary for the franchisees to do business.


Not only should the franchisor be concerned with the rates being paid for products, but they should be concerned about getting proprietary product lines created. A franchisor that does this will virtually eliminate the competition for each franchisee. Look for opportunities like these. We can always tell an astute franchise prospect from one that is less skilled when we’re asked “what kind of buying power do you have? And, what does your franchise do to set me apart from my competition in my territory?”.


5. Support – If you’ve been researching franchises for any length of time, you’ve undoubtedly heard the phrase, “in business for yourself, not by yourself”. That phrase describes the fact that, yes, you are your own boss, but we’re right here beside you to make sure that nothing bad happens to you.


It’s extremely comforting to most people to know that they’re not walking the road of business ownership by themselves. There is nothing easy about running a business, but by having support, the difficult becomes simple – “simple”, not “easy”. Remember that! If any franchisor tells you “it’s easy”, RUN! Because “easy”, will make you “poor”!


This list is not completely comprehensive. There are dozens more reasons why opening a franchise is preferable to opening your own business from scratch. But, like with anything in life, you have to decide if opening a franchise is right for you. Read our other blog articles to help you determine what type of business you want to open. Take our test to see what type of franchise you should open.


Keep an open mind during the discovery process. Don’t forget, you’ll be working with the people at the franchisor for a long time. Make sure that it’s a good fit for you.

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