Franchises come with a built-in customer base. That is the main reason to franchise a business idea rather than starting fresh. Clients move around all the time and you may end up franchising a business that is known to people in the community you decide to open it in. One of the most successful franchise models around to date is of course, Dunkin Donuts. No matter where you go and see one of these stores they almost always have a long line of waiting customers. Today at least one DD can be seen on every corner, along with lines of waiting customers from the moment it opens. That is because Dunkin Donuts spent a considerable amount of capital investing in marketing and brand recognition. If you do not know what Dunkin Donuts is, then you probably live under a rock.
When you start a new venture you have to do your own client gathering. It does not matter how visible you are if no one knows or trusts you enough to do business with you. You will have to invest a considerable amount of capital on marketing. If you market right potential customers will see your ads and get a feel for your business. They will spend time getting to know you and over the course of time, to trust you.
One advantage to starting a business from scratch is the investment capital. You do not need to have a set amount of dollars in your bank account to start because you have more leeway. The decisions will be 100% yours and creativity can be used to generate interest, funding, location and other pertinent parts of the business. You are 100% in control of how business is done.
Franchise companies usually have a set of rules for marketing, media relations, funding sources, investment, location, and other aspects for the business. That is because these franchises already have an established image they wish to maintain. Where you could possibly start a restaurant with as little as 5k, a franchise restaurant may cost you upwards of $100,000 initial investment to get things set properly and you may not break even for years. A lot of the decisions as to business model and process have already been made as well. Make sure you read through the material provided so you know what is expected of you because some franchises do reserve the right to revoke your license.
Starting a business is an important decision. Do your research whether you’re planning on franchising or starting a fresh business. Although a franchise could help you skip a few steps, you could find out franchising is just not for you. The same could be said for starting a business from scratch. There are rules that should generally be followed by industry. Remember that there are and have been companies, who have been doing things a certain way and depending on the location, people could be used to business being done in that particular way. It is important to understand the business and the mindset of your potential clients. Always weigh the pros and cons of franchising to starting fresh. But whichever direction you decide to go, go it at 100% capacity and with as much research as you can possibly do in order to minimize the mistakes you will make during the course of your development.
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