What Is A Franchise In Entrepreneurship | SkillsAndTech

The option to franchise a business to get into entrepreneurship is one of the most popular methods nowadays. Franchising allows the franchisee to own a business with a proven success method and a customer base. Normally, a franchise owner gets customers from day one, which is way different from having a business from scratch.

Transitioning to franchising from a career or having a normal business might look like it’s a hard job, but it doesn’t. If you have the funds and think you can handle the daily stress of managing people and a store, not much is holding you back. This article explains how you can start franchising and become an entrepreneur.

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How To Start Franchising?

Starting the franchising journey mostly depends on whether you have the funds for it or not. Depending on which brand you would like to buy the franchising rights of, the costs might be substantial, and you have to be ready for this. Once you have the funds, you need to get in touch with the franchisor to discuss a potential franchise agreement and start your discussions.

Once you agree on everything, you sign the franchise disclosure agreement, and you can start getting your store ready. However, remember that from the territory you will have the store on to the decorations you will have on the store, you can’t make any changes as the franchisor has their own guidelines that they will provide you with. The store, your products, staff uniforms, and their training must all be the same as the original brand.

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Pros & Cons Of Franchising

Franchising is not just a benefit that gives you the right to use a brand’s name and get you money without much risk. It has its pros and cons that you must be aware of.

Pros

• You get an already-established brand with a proven track of success,
• You don’t have to worry about the supplier, what to sell, training the staff, their uniforms, and everything else within the store,
• You have the option to scale faster than creating a business from scratch because you will already have an established customer base,

Cons

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• You have no right to change anything within the store or the products or services you sell,
• The store, staff, and anything that serves the brand’s name must always ensure to follow the guidelines of the franchisor,
• The franchisor has the right to revoke your right to use the brand if they think you are damaging the brand.

How Easy Is Running A Franchise?

Because you are getting a business that is already ready, it might seem like it doesn’t take as much effort as other businesses to run a franchise.

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Especially if you are changing from a traditional job to entrepreneurship by running a franchise, you have to prepare for all the things a franchise will bring. Because you have to obey the franchisor’s guidelines, regulations, and restrictions, you always need to check everything regularly.

On top of that, a franchisee must also always make sure that the store is providing quality service at all times to ensure that it matches the original brand’s service.

See Also: What Is A Franchise Store & How Do They Work

As a franchisee, you will have to do everything from a manager to cleaning because you need to control all of them. So, even though you will not have the stress of scaling a business, you will have to deal with the challenges franchising will bring with managing a store and ensuring everything works perfectly.

Franchising Vs. Creating A Business From Scratch

This is one of the most frequent comparisons new entrepreneurs make because both have ups and downs. That’s why it’s important to know what both of these things offer and what you can expect from them if you decide to go with either of them. It’s clear that franchising is a little bit easier than creating a business from scratch, but you have no full control over your store with franchising.

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Franchising

With the franchising option, you get a brand that you know will work, and you’ll have much less stress than creating a business from scratch. All you have to do is to agree with the franchisor on certain topics and ensure that you follow through with them. However, you have no control whatsoever over what you do in your own store, as the franchisor must approve it first.

The entrance barrier to franchising might sometimes be lower than creating your business from scratch, but it will still cost a substantial amount of money. You have to pay this price to get an almost risk-free offer and enter into entrepreneurship. Because it’s easier to do, most people start their entrepreneurship career by franchising and learn about running a business there before moving on to other adventures.

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Creating A Business From Scratch

Creating a business from scratch is somewhat a more advanced level of entrepreneurship and requires some experience beforehand. Because you will have to run everything on your own and there will be no guidelines or restrictions, it requires you to be able to do everything all at once. In addition, because you have no idea whether it will work or not, you will be taking a huge risk.

Also, the entrance barrier might be much lower than franchising if you want to create your own business. The more you scale up, the more budget you can put in while starting with as little as you can. However, this might change depending on the business you are hoping to create, as sometimes franchising might be cheaper.

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The Verdict

Getting into the entrepreneurship world might be stressful because there are many risks involved. Franchising is one method that gives you a way to learn without much risk while entering the entrepreneurship world.

Many who are transitioning to entrepreneurship from a career start with franchising and gain a considerable amount of experience. There are also some downsides to franchising, but all in all, you learn how a business work without getting involved in too many details.