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Why buy a
Franchise?
Franchising is a business model whose primary purpose is
risk minimization. Every study ever done on the success rate
of new (non-franchise) business start-ups concludes the same
thing. Starting up a new business is very risky. Most
studies show that over 90% fail within three years. The
primary reason that the failure rate is so high is because
the owners have to go through the learning curve of
operating that specific type of business.
Another reason why it is prudent to buy a franchise is that
a franchise investment can be thoroughly researched before
any significant expenditure is made. With a new business
start-up (non-franchise) you are always operating in the
dark. With a franchise the franchiser is a wealth of
information about the business from how to prepare a pro
forma to the best personality traits for the business.
Another very important reason to buy a franchise is
intertwined into its basic nature. Franchising inherently
leads to rapid growth, because the franchisees provide the
expansion capital. There are few restraints to growth in
franchising. As a franchise system expands into hundreds of
units many positive things begin to happen.
The name begins to become well known because
people see it everywhere. Most people associate size with
success. The bigger the franchise the better it must be. The
large number of units enables the franchise to advertise
heavily, which tends to increase sales.
A synergy begins to be created in which
success begets success. The franchise begins to squeeze out
competition through its sheer size. The franchise can buy
products in large quantity at significant discounts, which
it passes on to the franchisees.
In summary the primary reason you should buy a franchise as
opposed to starting up a non-franchise new business, is to
minimize risk and enhance your chances of success.
For more information about the Coldwell Banker franchise
system in Lebanon please contact us at:
customerservice@coldwellbanker-me.com |
