What benefits do franchises offer to entrepreneurs looking to start a business in a weak economy?
Mr. Franchise Inc.
This generally depends on the age of the franchise system. If the franchise has been around for 10 years or longer, it will have experienced up and down economic cycles and can advise on these. If the system is relatively new, franchisors may lack the depth of knowledge and experience needed to get through tough times. Speak with existing franchisees to see how much support the franchisor has given in the past and if they were satisfied with the support.
Chief Solutions Officer
Ascend Franchise Solutions
The benefit of a franchisor’s proven operating system may shorten startup growing pains. In a turnkey franchise, much of the legwork, such as a marketing plan and strategy, likely has been done. The experience and support of the franchisor will be critical, especially during tougher times. Before you jump in, talk to existing franchisees about their experiences. Validate what the franchisor is telling you and see if existing franchisees are satisfied and, more important, profitable.
CJ Woodburn & Associates
A successful franchise system has vast experience in launching and supporting new prospects in its system. The franchisor will have dealt with a variety of business conditions and personalities. This enables franchisors to train and guide franchisees through the typical obstacles that cause businesses to fail: inexperience, undercapitalization, high operating costs, etc. experience also should enable the franchisor to select prospects that have the best chance of operating a franchise successfully.