Franchises are a popular type of business model that bring mutual benefits to franchisors and budding entrepreneurs (franchisees). People who buy a franchise get the excitement of running their own business, while still receiving crucial support to make sure the arrangement is a success.
Anyone considering entering into a franchise agreement should seek advice from commercial lawyers to ensure they are fully aware of the obligations involved. In the meantime, here are five key advantages of buying into a well-known brand.
1. Established customer base
Franchisees don't have to build their consumer base from the bottom up; the franchisor should already have loyal customers that are aware of the brand and regularly purchase its goods and services.
2. Set-up support
One of the hardest parts of setting up a business is finding the right location, fitting out the store and advertising its presence. A franchisor will help with all these activities to ensure entrepreneurs start off on the right foot.
3. Easier to secure finance
Potential franchisees often find it easier to obtain credit when running businesses that already have a solid market presence on the back of the franchisor's brand. On the other hand, people starting an entirely new stand-alone business can struggle to secure adequate financing options.
4. Ongoing training
Franchisors want franchisees to succeed, which is why they offer comprehensive training across a number of areas. In some cases, people who run a franchise may have very little previous business experience.
5. More likely to succeed
Franchises are a proven business model and typically enjoy higher success rates than regular start-ups. Owners of profitable outlets not only benefit from increased earnings, they also boost their capital, which can be used to expand further.
To discuss legal issues relating to franchising, please get in touch with expert commercial lawyers in Brisbane.