Investing into a proven process and system can be the difference between success and failure for a business. With franchising, typically the concept has been proven over and over again to be successful by many. Given enough research, a prospective franchisee weighing the benefits of starting their own business and to investing in a franchise should see how franchising statistically as a far greater chance of success in the long term.
According to SCORE, Counselors to America’s small businesses, out of every 100 independently-owned small businesses, 90 percent will fail within ten years because:
1. 78 percent lack a solid business plan;
2. 73 percent are being overly optimistic about sales;
3. 77 percent are not pricing their products and services properly;
4. 70 percent don’t recognize or ignore their weaknesses and don’t seek help.
Now let’s address each of these reasons individually from a franchise investment perspective:
1. When investing in a franchise, you’re purchasing a defined road map or plan to follow to be successful. And, when committed to following the system, most franchisees will find success.
2. With a franchise, there is a track record to measure and review prior to investment. Whether the information comes from the franchisor or franchisees that you talk with during your research stage, sales data is available and measureable.
3. Pricing of products and services have already been set, tested and working in various markets.
4. As part of a family of businesses, a franchisee has a road map to limit risk and failure. They also have a broad network of franchisees to provide support and a franchisor who offers training and can counsel them on staying within the system.