Advantages

You don’t have to build from scratch

One of the major advantages of owning a franchise is that you don’t have to make it from the bottom level. It is all set up and ready for you. Whatever thing is needed to make your business or company run is ready for you to use. All you need to do is be shrewd and employ all the resources that you have to maximize the profit. You would never be required to undergo any problems that occur while setting up an entirely new business. In a franchise, someone else has already undergone that and made up the company and now you just have to run it in a way so that you can gain from it.

Motivated Management

Another stumbling block facing many entrepreneurs wanting to expand is finding and retaining good unit managers. All too often, a business owner spends months looking for and training a new manager, only to see them leave or, worse yet, get hired away by a competitor. And hired managers are only employees who may or may not have a genuine commitment to their jobs, which makes supervising their work from a distance a challenge.

But franchising allows the business owner to overcome these problems by substituting an owner for the manager. No one is more motivated than someone who is materially invested in the success of the operation.

Speed of Growth

Every entrepreneur I've ever met who's developed something truly innovative has the same recurring nightmare: that someone else will beat them to the market with their own concept. And often these fears are based on reality.

The problem is that opening a single unit takes time. For some entrepreneurs, franchising may be the only way to ensure that they capture a market leadership position before competitors encroach on their space, but also allows it to leverage human resources as well. Franchising allows companies to compete with much larger businesses so they can saturate markets before these companies can respond.

Increased Profitability

The staffing leverage and ease of supervision mentioned above allows franchise organizations to run in a highly profitable manner. Since franchisors can depend on their franchisees to undertake, So the net result is that a franchise organization can be more profitable. Unfortunately, it is difficult to prove this contention. This much we do know: Research done during the past 16 years shows top quartile franchisors put an average of 40 percent to the bottom line in 2003 respectively. How many industries can you think of where net incomes in this range are even possible?

Improved Valuations

The combination of faster growth, increased profitability, and increased organizational leverage helps account for the fact that franchisors are often valued at a higher multiple than other businesses. So when it comes time to sell your business, the fact that you're a successful franchisor that has established a scalable growth model could certainly be an advantage.

Ease of Supervision

From a managerial point of view, franchising provides other advantages as well. For one, the franchisor is not responsible for the day-to-day management of the individual franchise units. At a micro level, this means that if a shift leader or crew member calls in sick in the middle of the night, they're calling your franchisee -- not you -- to let them know. And it's the franchisee’s responsibility to find a replacement or cover their shift. And if they choose to pay salaries that aren't in line with the marketplace, employ their friends and relatives, or spend money on unnecessary or frivolous purchases, it won't impact you or your financial returns. By eliminating these responsibilities, franchising allows you to direct your efforts toward improving the big picture.

Reduced Cost and Risk

When you see the bigger picture, you will realize that owning a franchise reduces the overall cost to a great extent. You will get everything in hand from technology to support systems to marketing campaigns. You won’t have to spend on them separately but still get the benefit.

By its very nature, franchising also reduces risk for the franchisor. Unless you choose to structure it differently, the franchisee has all the responsibility for the investment in the franchise operation, paying for any build-out, hiring any employees, and taking responsibility for any working capital needed to establish the business.

You will get a established systems

You won’t have to create an entirely new system for your business if you own a franchise. Making a new system is very much costly and when you are getting all the computers set up in place and all the softwares ready to use, why not grab the opportunity? You don’t even have to worry about the operating system. You just have to use what you get wisely and prudently.

Support will be provided

In most cases, franchisers give a lot of support systems which are very much important if you want to run the business smoothly and at the same time make considerable amount of profits. You would need support to man all the telephones and communication systems and also for manning also those computer systems. Getting so much manpower in a few days of taking over the business is indeed very much difficult so when the franchisers have the option of providing it, don’t miss the opportunity.

The name is already recognized

When you start an entirely new company, time is required for that company to make a mark in the market. But when you own a franchise, you don’t have to worry about the name as it is already recognized. Sometimes it so happens, that your start-up won’t be able to become recognized in this competitive market but with a franchise you are getting the benefit of already having a name and a recognition.

Brand value and marketing

Best part of owning a franchise is that the brand value is already there and you do not have to invest in marketing. Marketing in any type of business is most crucial and expensive task.