What Kinds of Opportunities Does Franchising Offer? (Part 1)
There's a good reason the United States is called the Land of Opportunity. The spirit of independence is one of the cornerstones in the nation's founding. That spirit persists today in the world of business, where independent-minded entrepreneurs take the risks and reap the rewards of running their own business. There's something inspiring in the idea of doing it yourself, of making it on your own. And nowhere is this spirit of independence and potential reward more clearly available than in the world of franchising.
For decades now, franchising has offered individuals a chance at the American Dream. Whether in response to a dead-end corporate job, fear of being laid off or downsized, or simply in response to the entrepreneurial pull that burns in so many of us, generations of Americans have turned to franchising for the independence and financial fulfillment it provides. And, when carefully considered and diligently executed, franchising can indeed offer that independence -- and a whole lot more.
There are more than 744,000 franchise establishments in the U.S. One in 7 businesses in the country is a franchise. They create or support nearly 7.6 million direct jobs, and yield $674.3 billion of economic output for the U.S. economy i.e. (or 2.5% of the U.S. Gross Domestic Product). In 2015, the median average revenue generated by franchised units was $710,726. These numbers show there is little need to go out on your own and create a business from scratch -- a very risky move considering the failure rates of start-up businesses. Instead, through franchising, you can become an independent business person.
"Franchising is the champion of small business expansion worldwide," says Steve Olson, a franchise consultant. "Studies have shown that franchised businesses enjoy a success rate up to three times greater than independent businesses, because franchising provides greater business advantages, such as training and support, group purchasing power, advertising clout, and brand strength."
As a franchisee, you purchase the rights to use a brand or name in a given location or area. Your job is to open and operate that franchise unit to the best of your ability. Yes, there are corporate rules and requirements, and standards you must adhere to, but you are in control of your franchised unit: you hire, you fire, you train, you manage, and you reap the rewards. The money you earn (minus a small royalty stream paid to the franchisor) is yours to keep, spend, or invest back into your franchise or buy additional units.
A Proven System
One of the key beauties of franchising is that you can remain independent while you tap into a proven, well-oiled business machine and all that it offers. There's no need for you to create a product or service, no need for a proprietary business plan, and in most cases, no need to initiate marketing and advertising plans. The franchisor has already done all the work for you. And successful franchise concepts have been tried, tested, and tweaked to perfection -- and are backed by money, management, infrastructure, and an effective distribution system. What works on the East Coast will work on the West Coast -- and everywhere in between.
Additionally, proven franchise systems come in all shapes and sizes and offer all kinds of business opportunities. Franchising today does not just mean McDonald's or Burger King. Today there are hundreds of food, retail, and service-oriented franchise businesses to serve nearly every consumer niche out there, with new ones springing up every day. And the point of delivery is just as diverse. You can find successful franchises in standalone locations, shopping malls (some in smaller kiosk-style units), strip centers, mobile trucks and vans, and even home offices. It's easy to find a franchise that fits your needs.
As a franchisee, your up-front investment and continuing royalty stream paid to the franchisor buy you ongoing marketing and technical support, continued product and brand development, and even assistance with location, site selection, grand opening, hiring and training, management, and long-range strategic planning.
Joining a successful franchise means following the rules of that system, but that's the point. The wheel's already been invented. All you have to do is buy in and you're ready to grow.
2.2: Franchising in the Modern Age
3.2: Brand Awareness & Economies of Scale