The Advantages of Owning and Operating a Franchise
Franchising, as an industry first came into its own during the 1930s and 1940s when several hotels and gas stations decided to begin offering new dealers a comprehensive system of operational and marketing strategies. Since that time the franchising industry has become a national power in America's economy and a blessing for risk-averse entrepreneurs.
Why Franchising Is a Wise Choice
Franchising is growing rapidly as a business model because franchising works. It allows aspiring business owners to pursue their dreams in an industry they love while reducing much of the guesswork that usually accompanies a new business start-up. A franchise provides a proven system; a business model forged from trial and error. Today, franchising is a major force in almost every industry imaginable, accounting for a disproportionate share of retail sales throughout the US.
Franchisors provide their franchisees with benefits someone would not be able to get starting a business on their own. The most obvious is a proven business model with an established product or service, along with built-in name recognition. You also receive the necessary start-up assistance and training to avoid mistakes that other new businesses would encounter. In addition, you receive technical, operational, and managerial assistance unavailable to independent businesses.
Statistics on Franchising
Here are some interesting statistics gathered from the website of the International Franchise Association on franchising:
- The franchising industry employs over 18 million people in the US.
- There are believed to be more than 750,000 franchise businesses in the US.
- It is estimated that franchise businesses were responsible for over $1.5 trillion in economic
- According to statistics from the US Department of Commerce, less than 5% of franchise outlets fail annually.
- While franchises only account for 8% of all service business, they claim over 40% of all service-related revenue.
- If current trends are any indicator, the growth of the franchise industry shows no signs of letting up: more than 300 different types of industries and businesses are franchising, and a new franchise opens every 8 minutes, accounting for 35% of all retail goods and services sold.
Franchising has become the clear choice for entrepreneurs who acknowledge their need for guidance and who value a long-term plan for business success.