These days, franchises are quite in trend. There are many franchise opportunities in South Africa in almost every field. Before you decide to put your money in buying a franchise, you must look at the advantages and advantages of franchises. Like any business, you gain something as well as lose something in franchising. Let’s see the pros and cons.
The advantages of franchise are as follows:
You can become your own boss (at least to some extent) as compared to working under an employer. You can start your business even if you lack experience or capital.
You can avail backing support in franchising. Other start-up businesses do not have that advantage; they have to do everything from the scratch. In franchise the owner provides you support whenever you need it. For franchises, there is saying that “You’re in business for yourself, but not by yourself.”
You can get training and assistance for your business. Franchisers are very much interested in your success. That is why, they extend offers to train you and your staff, to set up your business, to select your site, to negotiate your lease, etc. You benefit from their advertising and collective buying power.
You can benefit from an already recognized brand name. In other businesses you face many difficulties to build recognition among your customers. It takes a lot of time for that. With franchises, there is no such hurdle. You get an already built brand name and image; it saves your money and time.
Seeing as there are many advantages of franchises, there are also some disadvantages.
Let’s take a look at those disadvantages as follows:
You have to work according to their set of rules. If you are thinking to start your new business because you don’t like working under a boss, reconsider your decision of buying a franchise. You cannot do whatever you want in franchise. There are certain rules and procedures and you are required to abide by them. That could be dress code, working hours, and the overall mode of working.
You have to share your profits. Yes, even after paying the initial amount of franchise fee, you owe them. Franchisors have a claim of a certain percentage of your revenues. In addition to that, sometimes you are required to buy their stuff for the business, which will be costly than the cheapest available stuff in the market.
There is nothing such as right choice or wrong choice. You have to weigh your options and choose the one that fits your needs. Some entrepreneurs would like to get a little assistance with their business, even if it comes with a cost. Some might not like to lose a bit of control.
Things to consider while buying a franchise
You need to keep the following in mind before you actually buy a franchise:
Choose what you enjoy doing. If you do so, chances are you would stay in that business for long term. You can get misguided by the prospects of high profits and remarkable growth, but the bottom line is, if you don’t enjoy it, you won’t continue it for long.
Look out for competition. Whether you are starting a new business or buying an already built up brand, it is important that you carry out a research. Know the completion of that business. Is the market saturated already? What are the competitors doing? You must get the answers of such questions before entering into any business.
The franchisors would try to sell you on the deal. They may present their projected profits, but it is better to look into it for yourself. Find out the past trends of their franchises, come up with your own projections and then decide.