The Franchise Business Model: The Pros And The Cons – Episode 3 – Part 2
If you’re thinking about purchasing a franchise, you need to watch this series on the pros and cons of franchising before you make any moves. Join the conversation between business coach and SBA entrepreneur of the year, Clay Clark, and the legendary franchise coach, Terry Powell, as they discuss what you need to know before you franchise. Lets start with the positives. Did you know that it’s often easier to sell a franchise business than a non-franchised business? You might ask why is that, well, a potential buyer is not just going to look at what you did with the business. They’re going to look at the franchise system, and how the business is doing overall. When buying an independent business, the only thing that’s going to be taken into consideration is what the current business owner did with that business. With a franchise model, even if the business is under performing, a potential buyer has the opportunity to collect data from the other franchise locations to see what the potential performance level may be. Now, onto one of the cons of franchising. When you purchase a franchise, the corporation will typically require you to maintain your books at a certain level. While this may seem like a hassle, one thing to ask yourself is why would the franchisor want to monitor those aspects of the business? It’s actually beneficial for the franchisee to know their numbers and by corporate making this a requirement, it causes the franchisee to pay attention to the numbers. You can’t expect what you don’t inspect. And the last benefit that’s discussed in this series is that you can determine how much money you want to make when you purchase a franchise. For more helpful information on franchises and the pros and cons that go along with franchising, check out the rest of the videos in the series.