Like any other business venture, there are both negative and positive factors to be considered in a franchising relationship. Statistics show that approximately 90 percent of new businesses will fail within their first three years of opening. With the odds stacked against the success of most new small businesses, some of the advantages of franchising can help to reduce certain risks.

A strong benefit to franchise ownership is the advantage of brand recognition. Rather than investing years of operation to establish a brand in the marketplace, franchise owners purchase instant consumer recognition. In a newer, less established franchise, the opportunity still exists to grow as the overall company’s name and recognition grows.

As a franchise buyer, you are purchasing the use of a proven system of operation. The franchisor has a defined business method, in conjunction with a product or service that has demonstrated success. The franchisee benefits from the work and experience the franchisor has invested in creating a successful business. Starting a business with a proven operating format provides less risk than an untested business venture.

Sometimes a franchisee can obtain assistance from the franchisor in securing financing for their venture. The franchisor may even make arrangements with a lending source on behalf of the franchisee. Financial institutions might be more prone to lend money to a franchisee if they have the backing of a thoroughly established company.

Marketing support is another advantage of owning a franchise business. Franchisors usually have professionally developed marketing campaigns that are run nationally, regionally, or even internationally, and benefit all franchisees. A portion of the franchise fees that a franchisee pays go directly towards franchisor marketing efforts. A franchisee can still decide to conduct their own local marketing efforts, with guidance and marketing materials from the franchisor.

An additional positive aspect for franchisees is the exceptional training programs provided by most franchisors. These training programs may review policies and procedures, sales instructions, employee management, inventory purchasing, and equip both employees and franchise owners with the skills to efficiently perform their jobs. Training techniques may involve a combination of both classroom and hands-on training on site. Systematic preparation will aid in smooth business opening and operations, and create added possibility of success.

Franchises offer ease of inventory and equipment purchasing for the franchisee. The large group in a franchise creates greater buying leverage with suppliers, thus resulting in lower purchasing costs for goods and services. Many franchisors have already established solid relationships and purchasing arrangements with suppliers, or may even sell the supplies to their franchisees directly.

Attracting employees in order to staff a new business operation can be challenging. A well-know and established brand name will draw more potential employees than an unknown business, and reduce the strain of searching for qualified personnel candidates.

There are many benefits to the support and proven methods that come along with franchise ownership. A proven product, established name, and expert support may ease the start up process. The advantages of becoming a franchisee can make the path to entrepreneurial success less rocky than an independent business attempt.