Starting your own business from the ground up can be a lot of good, honest work without any guarantee of long-term success. Most independent business leaders probably have at least one – if not multiple – stories about almost throwing in the towel when they were first starting out. Maybe financial solvency became an issue as the enterprise progressed? Maybe they lacked the managerial know-how to tread murky market waters? Maybe they lacked vision? Whatever the case, all you know is as a potential business owner, you don't want to experience the same kerfuffles as your colleagues.
Lucky for you, franchising can be a solution to ease your troubled mind. Here are three reasons why becoming a franchisee could be the best investment you make in 2015:
"Franchisees have the best of both worlds."
1. Harness the power of the corporation
Though Entrepreneur hesitates to ascribe an exact figure to the success rate of franchises, its research found a number of sources with percentages ranging from the low-60s to the high-90s. Inversely, according to the U.S. Small Business Administration, a startup's chances of staying open and active diminish over time. While 69 percent of small businesses survive the first two years, only 26 percent will still be around at the 15 year mark. Remember: Organizations like McDonald's – possibly the franchise to end all franchises – started off as a hole-in-the-wall burger shack and grew to the global titan it is today over decades of navigating an ever-changing market.
No one can predict how well-received a business will be, franchise or otherwise. However, the likelihood of success is far more believable when a franchisee is able to bank on an established business already existing in the public consciousness. Not only will brand recognition help draw in more customers and drive profits up, but it also pads your leverage behind the scenes when establishing financiers to help fund your big undertaking.
2. Retain your individuality, but shed the risk
Franchisees have the best of both worlds. In exchange for granting permission to operate under their companies' names, franchisors contractually obligate franchisees to follow a number of guidelines to ensure uniformity between chains and proper use of the licensed trademark in question.
But instead of griping because of the appearance of sacrificed freedoms, think about the risks you're avoiding by letting the "big wigs" make these decisions for you. According to Franchise-Info, franchisors will almost always have control over supply chain management. So while the managers you hire might be in charge of scheduling food or product delivery, the system is already in place for you. No need to hire a trucker or a communication service to link everyone to a distributor. Independent businesses would need to firm up their own logistics team, which could cost more than they bargained for. Signing onto a franchise means getting a large portion of these services bundled into your initial agreement.
3. Start this year and add benefits
According to a study conducted by IHS Economics in conjunction with the International Franchise Association Educational Foundation, 2015 just so happens to be a great year to start a franchise. Not only will franchisees be riding a four year growth outpacing all other forms of business, but their gross domestic product is projected to increase by more than 5 percent.
Equipment and franchise industry piece brought to you by Marlin Equipment Finance, leaders in equipment financing. Marlin is a nationwide provider of equipment financing solutions supporting equipment suppliers and manufacturers in the security, food services, healthcare, information technology, office technology and telecommunications sectors.