As you know there are pros and cons to all aspects of business. Well, the same goes for choosing to join a franchise network or not.
To become a franchisee or not to become a franchisee, that is the question?
Let’s go through 5 different pros and cons to consider when making a big decision like this one.
As you know, franchises have certain brand guidelines that must be followed. So, it can seem restricting if you are wanting to make changes or do something outside the brand guideline.
(2) Higher Start Up Costs
This upfront costs including the franchise fee will probably be higher than opening your own, but it is because you are paying for a proven business model which sets you up for success.
In the long run, you’ll probably spend less money on the franchise than the money you lost through your own trial and error.
(3) Royalty Fee
As a franchisee, you are technically purchasing the right to use the brand name, business systems, proprietary technology, support and much more during your franchise agreement.
In exchange, for these items you’ll pay an on going royalty. This is usually a percentage of gross revenue or it may be a fixed fee depending on the franchise.
(4) Lack of Financial Privacy
If you want to own part of a franchise you’ll probably have to sit down with your coach to review your financials. For some, this may be uncomfortable. For others, this wil.
(5) Potential for Conflict
Since you will be working with a franchisor, there will be potential for conflict.
(1) Proven Business Model
Although there might be restrictions in franchising, you are buying into a proven successful business model! This lowers your risk and increases your chances of success.
(2) Easily Secure Financing
Did you know that most franchises have a relationship with the SBA and are on an SBA Approved Franchise list. This can help make attaining financing easier than going at it alone.
(3) Brand Recognition
This can be extremely beneficial when you are just starting out. If you are franchising with a brand that is already well-known, it can make lead generation much easier for you.
(4) Buying Power
Being part of a franchise network can give you more buying power. Franchises can partner with certain companies that help you get your furniture, fixtures, equipment, software, and other items at a cheaper cost than if you were doing it for your own business. This can result in a big savings.
(5) Business Coach
Your franchisor will want you to be successful. Your success is their success! So, they’ll help you in any way possible to ensure you’re on the right track.
They can share extremely valuable information from other partners in the franchise network that others would never know except through trial and error.
Although these are just a few pros and cons, they provide some perspective to help you make a better informed decision if purchasing a franchise is right for you.
#seniorcare #adultdaycare #franchising
0:00 – Intro
00:43 – Con #1 Restrictions
01:03 – Pro #1 Proven Business Model
01:45 – Con #2 Higher Initial Fee
02:19 – Pro #2 Easily Secure Financing
02:47 Con #3 Ongoing Fees
03:34 Pro #3 Brand Recognition
04:03 Con #4 Lack of Financial Privacy
04:46 Pro #4 Buying Power
05:18 Con #5 Potential for Conflict
05:55 Pro #5 Business Coach
06:36 Closing Remarks
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