Investing in a business franchise can be an exciting opportunity for many entrepreneurs. There are many benefits to investing in a franchise that you might not know about.
It’s a proven formula
When you buy into a proven franchise concept, you avoid many hurdles that new startups might face because the franchisor has already worked out the kinks and laid a solid foundation. Good franchisors have everything systemized and ready for you, from marketing and branding to site selection and approved vendors.
Franchises offer easier access to financing
Franchise companies often provide in-house financing for part or all of the total startup investment. This will eliminate unnecessary time searching for approval from third-party lenders on matters like franchise agreements. The focus will be on you and what you bring to the table as a franchisee.
A built-in support system
Whether you need to negotiate the terms of a lease or your POS system is acting up, the franchise can help you. The relationship between franchisees and the support they offer each other is extremely valuable. The improvements are exponential when franchisees are well-connected and share best practices.
A franchise is attractive to the SBA
With competitive rates and longer terms, SBA loans are a smart way to fund your franchise unit. There are also no points, no balloon payments and no pre-payment penalties. According to SCORE, a nonprofit resources partner of the SBA, franchise loan applications are looked upon more favorably by the SBA than loans for independent startups. Franchises are a safer bet than independent startups, so the SBA typically feels more secure granting a loan to a franchised business.
Most consumers look for businesses that they are familiar and comfortable with. Instant access to a recognized brand offers a built-in security blanket. During difficult financial times, customers are more likely to go with what they already know. It’s about recognition and consistency.
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