There's been a lot of growth in franchising over the past few years. Much of this is due to the simplicity of buying a franchise as opposed to starting a new business.
In this blog, we'll go over four things prospective franchises should know about franchising:
1. Franchising doesn't discriminate
We're not claiming that everyone involved with franchising is devoid of prejudice. No one will stop you, however, from buying a franchise based on your race, gender, or faith.
This edition of the Franchise Business Review points out how women in particular are having success as franchisees. Here are some of their responses to a survey regarding their satisfaction:
- I enjoy operating this business – 90%
- I enjoy being part of this organization – 88%
- Would recommend my franchise brand to others – 85%
- I respect my franchisor – 84%
- I believe my franchisor acts with a high level of integrity – 80%
- Would “do it again” knowing what I know today – 74%
To buy a franchise, you need a good business mind, motivation, perseverance, and a means of financing your investment. It has nothing to do with your race, gender or religion.
2. A countrywide phenomenon
Just look at these results from the Franchise Business Outlook for 2017. It lists the states where franchising is growing the fastest, and they're spread out all over the country:
- Arizona: 4.7%
- Utah: 4.6%
- Nevada: 4.4%
- Florida: 4.1%
- Colorado: 4.1%
- South Carolina: 4.0%
- North Carolina: 3.8%
- Georgia: 3.8%
- Tennessee: 3.8%
- Texas: 3.6%
There are plenty of good reasons for this, which we previously outlined in this blog. In short, new regulations (or lack of) make franchises more attractive and the franchising model is applicable to just about any industry.
3. Franchises have a higher success rate than small businesses
Don't let anyone tell you otherwise -- franchises can fail. It happens all the time if they're not run correctly.
But the good news is that franchises have a higher success rate than new small businesses. According to this recent Entrepreneur article, the high success rate is one of the reasons why franchising now "makes up a significant part of the national economy":
"Government research over the years has indicated that the success rate for franchise-owned endeavors is significantly better than the rate for non-franchise-owned small businesses. In short, the good news is that franchising makes up a significant part of the national economy and presents a statistically better chance for success than other business options."
That trend is expected to grow. Franchises already make up some fraction of the GDP, and there's plenty of room to grow in that respect.
4. Multiple financing options
One of the main concerns of buying a franchise is the upfront cost. A staffing franchise at Nextaff costs between $60,000 and $132,000. Most people don't have that kind of cash sitting in their savings accounts.
But as we mentioned before, franchising already makes up a significant amount of the national economy, and you can bet that not every franchisee had that kind of money either.
Well, the results from the survey by Franchise Direct explain how exactly prospective franchisees plan to finance their investments:
- Angel investor
- Commercial bank loan
- Credit card(s)
- Credit union loan
- Family and friends
- Personal savings/retirement fund
- SBA-backed loan
Only some of them plan to use personal savings. The rest will use other means of financing to buy their franchise. Of course, you can also use a combination of these options to come up with something optimal for your specific situation.
The point is that if you don't have the cash upfront, then you just need to be a little creative in terms of financing the initial investment.
To talk more about the franchise industry, staffing franchises, or anything else, contact us today. If you would like to learn more about the Nextaff staffing franchise opportunity - click the video link below.