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- CALL 01483 273 478
One of the most obvious questions that would-be entrepreneurs have about the best route to business ownership is whether they should start afresh as an independent, or go down the franchise route. Obviously, there are pros and cons to each, so let’s take a closer look.
There is a definite allure to ‘going it alone’. For one thing, you aren’t constrained by an existing brand or model and can do things in the way that you want to. Running your own business allows you to have control of when and where you work, how you want to build and grow your business as well as having decision-making autonomy and the benefit of reaping the rewards exclusively. This may be appealing to someone with plenty of business experience, a large budget and the luxury of being able to make mistakes (as these will invariably happen when starting up a new business from scratch). However, for other entrepreneurs who are keen to maximise the chances of success, it may not be the best approach.
A dealership and a franchise are two forms of carrying out business through association with a company that is already established. Both have similar pros of dealing with a business that already has brand recognition and, therefore, less consumer resistance and a ready-made client base. However, there are several differences between a franchise and a dealership and one of the main differences is how they are run. A franchisee uses another company’s successful business name to operate what is effectively an independent branch of the company. The franchisor maintains a degree of control and supports with elements such as training, sales and marketing whereas a dealership is managed by an independent entrepreneur who can run the business as they see fit.
Licensing is another appealing business arrangement for those looking to expand. Under the licensing model, a company sells licences to use its property, design, brand or business programmes. The main difference between this and a franchise is that these licences are usually non-exclusive, and the licensor doesn’t control the licensee’s business operation.
Franchising is a great way to start a business when you want to work for yourself but are a little unsure on how to start and aren’t keen on taking the larger risk of starting your own independent company. Franchising allows bigger companies to branch out and grow, while giving people the opportunity to run their own business with the help of established firms that have already created a proven formula for success.
Research shows that around 500,000 people start a new business each year – and the figures have grown during the Covid pandemic, with many people setting up side gigs or using lockdown to pursue longer-term goals of working for themselves. However, many of these businesses will fail and, in fact, research suggests that just 50% will survive their first five years. This can be down to many things; a changing market, a lack of experience, insufficient capital and so forth.
Franchising offers a number of benefits to would-be entrepreneurs. For example:
1. A franchise investment involves buying into a proven business model which has already established itself in the market
2. You buy the rights to work an exclusive territory, eliminating the risk of within-brand competition
3. The franchise provides all of the training, the systems and the support
4. The franchise uses their expertise to invest in marketing at a national (or even international) level
5. Vital inventory and business assets such as the website, equipment and business manuals are provided in a ready-to-go format
6. You join a network of other entrepreneurs who can share their advice and experience, giving you that vital sense of community and support as you grow your business
7. Some franchises are flexible allowing you to work part-time and from home
8. There are franchises for sale to suit all budgets
9. Franchises can be extremely successful, and the returns are based real-life results
Ultimately, the right step for you will depend on your goals. If you are a confident and experienced business person with a new idea, the budget to fund your own endeavours and the desire to work autonomously, then you might choose to take the plunge into solo business ownership, a dealership or licensing. Alternatively, if you are keen to buy into an established system and to benefit from the advantages above, you may choose to invest in a franchise.
PGH Beegone Franchising Limited
Hivegrove
Kings Court, Burrows Ln
Gomshall, Guildford
Surrey, GU5 9QE
Tel: 01483 273 478
PGH Beegone Franchising Limited Registered in England no.13147543