For a start-up entrepreneur, there are several advantages to investing in a franchise:
- It is still your own business – even if you are sharing the profits with the franchisor
- The investment should be in a tried and tested format and brand
- The franchisee gets advice, support and training. The franchisor will also supply key equipment, such as IT systems, which are designed to support the operation of the business
- It is easier to raise finance - the high street banks have significant experience of providing finance to franchises
- No industry expertise is required in most cases
- The franchisee benefits from the buying power of the franchisor
- It is easier to build a customer base – the franchise brand name will already by established and many potential customers should already be aware of it
- The franchisee is usually given an exclusive geographical area in which to operate the franchise – which limits the competition (since operators of the same franchise are not in direct competition with each other)
Overall, investing in a franchise is a lower risk method of starting a business and there is a lower chance of business failure
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