Man sitting and writing

In Brief:

      • The path to financial stability can be arduous on your own.
      • An entrepreneur can build their business from the ground up or decide to become a franchisee.
      • The franchise route offers the ability to snap into a proven business model with years of experience.
      • The average initial franchise fee is between $20,000 and $50,000.
      • The International Franchise Association claims that 90 percent of franchise owners are successful.

There’s an old adage: when we’re young we work for our money, when we get older we want our money to work for us. For many that means investing in the stock market, mass mutual funds, or treasury bonds. For others, this may entail a much different path to success.

By tapping into the franchise business, you will find yourself on a proven road to wealth without the hassle of having to do it all alone. Imagine buying into a well-known company with a proven sales record and gaining advice from someone with years in the industry that would take you a life-time to cultivate on your own.

The franchise offers you the opportunity to skip the line of small business owners looking to build their business from step one. Here are just a few benefits to owning your own franchise as well what your likelihood of success will be.

How do franchises work?

Person with computer writing

When an entrepreneur starts out, they have two options. They can either start their own business and build from the ground up or purchase a license from a proven business to sell their products, use their name, and learn their methods. The entrepreneur returns the favor by providing the aforementioned fee and a royalty on its sales.

Franchisors typically require a royalty between five and six percent. Royalties are usually fixed meaning they are non-negotiable. Keep in mind that the more established a franchise is (ie:MacDonald’s) the less negotiating power you will have when it comes to that all important royalty percentage. A less established franchise may offer a more favorable royalty deal.

Two People Helping Each Other Climb Up Bar Graph

The Benefits

The risk of failure is much less for the entrepreneur because they are buying into a proven business model. Furthermore, when one buys a franchise they also tap into proven technologies, knowledge, and developed work methods.

Imagine trying to compete with Burger King, a conglomerate with decades of knowledge in the Burger industry. I’m not saying it would be impossible, but the franchise method allows for an expedited path to wealth. Good luck pulling your hair out trying to solve your manufacturing costs.

Finally, the entrepreneur is able to attract investors with greater ease. Investors will be less likely to buy into an unproven business plan with no track-record of sales. With the power of a multi-billion dollar corporation behind them, the franchisee appears much more attractive to creditors.

Two men talking about franchises

Likelihood of Success

Remember, there is safety in numbers. Why break your back flying solo on the voyage to a better tomorrow when you can join a community of franchisees, all sharing in the expert knowledge, methods, and brand recognition that they did not need to develop themselves?

With the price of a franchise costing on average between $20,000 and $50,000, you will need some capital to buy in, but the results can be rewarding. While there is no real consensus on the success rate of franchises, several independent studies support the model.

The International Franchise Association claims that 90 percent of franchise owners are successful. The incredible success rate of franchises is likely one reason why the franchise industry is an economic driving force. According to the legal site Lexology, there were over 7.6 million employees working at over 730,000 franchise outlets accounting for roughly $674 billion in output!

happy franchise employees

Is franchising right for you?

The franchise path offers you the chance to become your own boss, call the shots, and partner with experts of the industry. Why take the road less traveled when the paved one has a better chance at leading to success?

amf ad articles revised

Callens Capital