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Proud to Own a Franchise Business in America

Many people are interested in buying an existing franchise location or in establishing a new franchise location. There are many advantages in owning a franchise including an already established business model, a quality known product, protection from market fluctuations, marketing support from the franchisor, and owning a business that can be readily sold.

World sales report analysis shows most of the persons/ buyers interested in buying an American franchise business are interested for the following reasons:

Effective management

The franchisor will continuously monitor store sales, periodically count inventory, notify owner of fluctuations of store sales, assist to increase store sales, provide training to business owners and employees, introduce business sales promotions, high-end marketing, accounting work, monitoring market analysis, bring new products and services which increase sales, and also they focus on particular areas of need, etc. This assistance certainly helps you to increase the time focused on your sales and also reduces your personal management risk. Their updated technology and methods can boost your sales and you will be running the business successfully.

Great marketing by the franchisor

One of the keys to success is marketing. Any products or services will be known to customers based on the advertising. The company spends at least 4 to 6% of their revenue for marketing and that constantly reminds the customer about the products, services, and promotions which makes them your everyday customers. The success of any business directly relates to marketing and that costs a lot of money. As an individual, it is hard to spend that much money and it takes a longer time to build a reputation. But, buy a franchise business and you chance of success will be higher.

Increase sales

One of the most common reasons to buy a business is to increase your cash flow. In order to do good sales and make money you have to add different products to satisfy the customers’ needs. As an individual owner it is hard to add a variety of products and services, as it costs a lot of money, labor, and supervision to effectively add new things. In the franchise business, the management knows what the community needs and they add those things with low cost and high yield returns, and that brings more sales and high returns to the business. This is one the most common reasons why buyers want to buy a franchise business/branded business rather than an individual business/unbranded business

Price to beat

The sales volume and cash flow of the business mainly depends on the sale price of the goods. The inventory companies will offer a lower price or discounts if you buyer at a higher volume. As an individual business owner you cannot buy as much volume and variety of inventory, which in turns reduces your buying power. This is one the most common reasons why individual business prices are higher and have less variety than franchise stores. However, you still have to run your business. You have to sell the goods for a higher price by keeping your margin, paying off bills, and making positive cash flow. Whereas the franchise companies exercise this opportunity and even sometimes they renegotiate with manufacturers to lower the price of goods as much as possible. Also they will demand a longer credit period as possible. This is one of the greatest advantages of a franchise business compared with individual business.

Future and longevity of the business

Any business, in the initial period, looks attractive and profitable. But the world is changing. Technology is bringing new products, demands, needs, and requirements to the community. In order to satisfy the customer’s needs and to match the progressive changes, the business owner has to add those changes to survive in business. To make all these changes owners have to spend a lot of money. Individual owners cannot afford to spend the required amount; either they have a lack of reserves or fear losing their savings, and this leads to a decrease in sales or closing of the business. Whereas the franchisor has a lot of money and surplus reserves which allow them to make necessary changes to satisfy the customers’ needs. This leads to longevity of the business. This is one of the most common reasons why business owners want to own a franchise business rather than an individual business.

Assistance from the franchisor

No matter what, all businesses undergo changes over a period of time and need new technology and tools to survive. The franchisor constantly monitors the need for changes, and once they identify needs, they add those changes to the business model. For any reason, if your sales go down, they will step in to your business or operation and they will identify the problems and rectify them. They always work because your success is their success. Their support in all fields is part of the franchise agreement to keep you as a successful operator. If you are an individual owner you do not get this kind of support and backup and you have to resolve your own problems. Hence most entrepreneurs want to buy a franchise business.

Part of big company

Every business owner wants to have some recognition and reputation for them and their business as that is their social pride. Most individual owner businesses do not get the correct recognition even though they are making money because people are unfamiliar with the nature of the business, worth, and model. Surprisingly sometimes similar businesses have a low profile in some areas. In order to have a reputation and recognition in society, entrepreneurs want to have or own franchise businesses as the big company is a feather on their hat.

Increase the success rate

World business sales reports and analysis shows that franchise businesses are more successful and profitable than individual owner businesses as they are sharing risk among them and working collectively provides more opportunity, expansions, financial strength, good business models, and franchises can adjust business services and products according to the market and customers, needs. Collectively this gives the franchise business owners more success than individual business owners and that tells you why buyers want to have a franchise business.

If you want to know why and how you should own a franchise business or have further questions about the greatness of owning a franchise business, please contact us at help@bizworldusa.com or 415-234-8833 and one of our professional consultants will contact you.