How Franchise Opportunities Go Against Starting Your Own Business
Australia is arguably the world’s Franchise Capital. With over 1000 franchise networks in a relatively small market, there are plenty of great franchise opportunities for potential small business owners. It is estimated that over 70,000 businesses are operating within a franchise chain in Australia. So how do they stack up compared to other standalone businesses? Well, according to a Franchising Australia 2006 survey, less than 2% of franchises ceased to operate within the 1st 5 years, supporting the claim that franchise failure rates are lower. Compared with an industry wide average failure rate or around 60% – there seems to be a distinct advantage to belong to a franchise network.
However, joining a franchise chain is a big step, and you should not jump into it based solely on the figures above. You need to consider your skills set, your retirement plans, ability to make lease repayments & long term commitments, and many other factors. Many investors are tempted to open a franchise with flashy ads, promises of a high income, and hassle free setup – just to find themselves with a long term commitment in an industry that they are not suited to. Before diving in, you must look past promises or slogans from the franchisor, and be practical. You should take the franchise opportunities outline for a 2nd opinion by a financial advisor, and possibly even a solicitor even if you think you have everything covered. Do not trust a casual attitude by your friends or even your spouse.
Franchise opportunities can have quite significant advantages. Instantly you stand to benefit from decades business experience. All the knowledge accrued from years of trial and error, franchise staff manuals, training and an endless amount of resources can be made available to you. A standalone business, that does not belong to a franchise network, may face years of misguided business decisions & hundreds of thousands of dollars just to gain the knowledge that is simply handed to you upfront.
Tasks that a franchisor may be able to help you with are: assessing your compatibility with the franchise or perhaps looking at different franchise opportunities they might offer (such as a small shop VS high volume outlet), selecting a shop location, negotiating a lease, self-auditing, stock control, ad content & templates, franchise equipment acquisition, and many other factors depending on your choice of industry. The franchise head office normally has a list of preferred suppliers to facilitate the above which can save you thousands and a lot of lost time. Assistance with finding employees is invaluable at times, and the franchisor will no doubt be more experienced and know what to look for in a candidate
In contrast, a big advantage of starting your own enterprise over exploring with franchise opportunities is the flexibility within your operation. Rigid franchise rules and contracts can be very significant, but this tends to be evident for the more business savvy operators. If you have run your own operation before and now suddenly you have to stick to reams of pages of franchise guidelines you may find constant conflict with the franchisor. In some cases franchisees even abandon the franchise name after paying large setup fees & licences.
Writer Louise Servage is works at franchise opportunities a website that is fully dedicated to Australian Franchise opportunities the perfect place to start before starting a business.



February 3, 2012
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Posted by Louise Servage
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