Franchising: The Pros and Cons  

Franchising: The Pros and Cons  

Thinking about investing in a franchise? If you are pursuing this type of investment, there are some resources available that can help you succeed. There are some definitive pros and cons associated with franchising; here is what you need to know: 


Franchises come with a brand, so some customers or clients will already recognize the name. This is a valuable aspect of franchising not found in other small business ventures.   


One of the biggest elements of starting a business is writing up your business plan. This is much easier with a franchise- the plan has already been written! Furthermore, the business plan in place has proven itself to work.  


When you invest and buy into a franchise, know that there will be contracts to sign. These indicate that you are aware of and will adhere to the agreement- as well as the things you can and can’t do with the business. More on that soon! 


Sometimes, training staff can be a challenge. Franchisees have a training program in place already, so it is easier to bring on new talent and get them up to speed.  


Franchises typically have money allocated for advertising and marketing. Sometimes, this includes national campaigns that can reinforce your brand- but at a fraction of the cost to do it alone. 


Alternative lenders and capitalists are often willing to work with franchisees- which gives this type of investment an edge over other small business ventures. Furthermore, there are loan funds specifically earmarked for franchises by the Small Business Administration, or SBA. Visit the website to find out more about eligibility.  


As previously mentioned, you are under a franchise contract. One of the main drawbacks of franchising for many entrepreneurs are the established rules that are in place. While you are still your boss, you do not have complete autonomy over how the business operates in many respects.  

Startup Costs 

The costs to buy into an established franchise can be lofty- which is another con of franchising.  


If one of your franchise locations fails or experiences a bad press, it could impact your location negatively. Word of mouth could cause issues for all franchises under the same brand in these situations.  

Thinking about investing in a franchise? Talk to the finance professionals at Charis Commercial Capital first.  We offer alternative solutions to business financing that you simply may not have thought of; call or visit today! 


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