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A franchise is a right to market, create, and sell another company’s products or goods. That right is granted to the franchisee to work within a specific geographical area while abiding by specific company rules. Most people think of Subway, McDonalds and pizza chains when they think of franchises, but there are many other types of franchises including auto stores, UPS stores and even senior living centers.
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Most people buy and open a franchise business to be their own boss, to follow a passion or because they’ve heard that a franchise can be quite profitable. Whatever the reason for wanting to open a franchise, there are several measurable advantages.
There are seven main advantages to buying a franchise. The biggest advantage is that the business is "turnkey." It's already established. This means you don't have to worry about obtaining trademarks, copyrights, patents or most other items you'd have to get yourself if you opened a business from scratch.
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When you open a franchise you immediately have an established brand and/or product people are already familiar with. The name is a trademark and identifies your company or service. You have name recognition from the beginning. In contrast, when you open your own business there’s no familiarity; a franchise offers what you need to get customers in the door from day one.
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Proven Business Model
You can work from an established and proven business model that’s been in use since the first store was opened under the company. Basically, a business model is a plan that a company devises to be profitable. All of the math is already done for you too; you know from the beginning how much cheese you can put on every pizza, how much bread to bake, or how much motor oil to buy. There’s no guessing and no trial and error. You’ll also have access to successful business plans, making writing your own business plan much less painful.
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You are trained in all aspects of the business by professionals who know the business. As part of the franchise deal, you’ll get onsite training in all facets of the industry including, but not limited to, how to make pizza dough, how to use the computer software and how to manage the books. Additionally, you’ll have ongoing access to support and resources, including franchisee seminars, classes and continuing education.
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National advertising campaigns are often included in your franchise fee. You can be sure that the company will advertise because they want you to be profitable; these advertisements are broadcast nationally.
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Franchises are a turnkey business. With everything already in place, tested, and working, you can open a business quickly.
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Because banks and similar institutions are sold on popular franchises, you’re more likely to get funding and financing. Banks would much rather finance a proven business than a brand new one.
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Follow your Passion
The best part of owning a franchise is that you get to do what you love. Franchises are available in fast food, retail, automotive, cleaning and restoration, health and fitness, business services and more. If your passion is ice cream, open a Carvel Ice Cream store; if your passion is travel, open a Cruise One or Caribbean Cruise Lines Travel franchise.
The Top 7 Advantages to Buying a Franchise (Pt 1 of 2)
Uncover the top seven advantages and disadvantages to buying and owning a franchise in this article series. Is franchise ownership right for you?