Franchising is the practice of using another firm's successful business model. Franchising gives you the opportunity to own your own business while skipping some of the more detailed steps. According to the International Franchise Association approximately 4% of all businesses in the United States are franchisee-worked.
Due diligence is necessary when purchasing a franchise and there are often substantial costs over and above the costs of license and franchise fees and operating manuals. Most franchisors require a monthly technology and or marketing fee as well as taking a percentage of sales. Don’t assume that you will spend all your time working out of your home. A substantial amount of time for most of these businesses is required outside of the home.
If you are interested in starting a business later in life or after you have “retired” from the work you have been doing for many years there are a number of reasons to consider investing in a franchise.
- Improved your chances of financial success; typically, success with a franchise business is better than an individual start up.
- Easier to get funding ; most franchises will assist you get financing.
- Time to profit is generally shorter. Most franchises are like to be profitable more quickly than an individual startup. Also because franchises are known entities they are easier to sell and their resell time is significantly shorter.
- Ease of start up; a franchise is like a business in a box. Franchisors provide you with just about everything you need to get started and provide training as well as operational manuals and operating instructions.
- Purchasing a franchise is generally a safer investment for older Americans and retirees. You can select from thousands of franchise businesses that best meet your interest, experience, available time, money you can invest and money you expect your business to generate