{"id":9420,"date":"2024-09-02T15:28:45","date_gmt":"2024-09-02T05:28:45","guid":{"rendered":"https:\/\/ph.trdemo.com.au\/rogersonkenny\/?p=9420"},"modified":"2024-12-12T19:39:53","modified_gmt":"2024-12-12T08:39:53","slug":"advantages-and-disadvantages-of-buying-a-franchise","status":"publish","type":"post","link":"https:\/\/ph.trdemo.com.au\/rogersonkenny\/advantages-and-disadvantages-of-buying-a-franchise\/","title":{"rendered":"Advantages and Disadvantages of Buying a Franchise"},"content":{"rendered":"[vc_row type=”in_container” full_screen_row_position=”middle” column_margin=”default” column_direction=”default” column_direction_tablet=”default” column_direction_phone=”default” scene_position=”center” left_padding_desktop=”100″ constrain_group_2=”yes” right_padding_desktop=”100″ left_margin=”50″ constrain_group_8=”yes” right_margin=”50″ text_color=”dark” text_align=”left” row_border_radius=”none” row_border_radius_applies=”bg” overflow=”visible” overlay_strength=”0.3″ gradient_direction=”left_to_right” shape_divider_position=”bottom” bg_image_animation=”none” gradient_type=”default” shape_type=””][vc_column column_padding=”no-extra-padding” column_padding_tablet=”inherit” column_padding_phone=”inherit” column_padding_position=”all” column_element_direction_desktop=”default” column_element_spacing=”default” desktop_text_alignment=”default” tablet_text_alignment=”default” phone_text_alignment=”default” background_color_opacity=”1″ background_hover_color_opacity=”1″ column_backdrop_filter=”none” column_shadow=”none” column_border_radius=”none” column_link_target=”_self” column_position=”default” gradient_direction=”left_to_right” overlay_strength=”0.3″ width=”1\/1″ tablet_width_inherit=”default” animation_type=”default” bg_image_animation=”none” border_type=”simple” column_border_width=”none” column_border_style=”solid”][vc_column_text text_direction=”default”]\n

What is a FRANCHISE <\/span>business<\/span>?<\/span><\/h2>\n

Let\u2019s get clear on what a franchise business is<\/em><\/strong> – a franchise business model is a system where a business owner (the franchisor) grants an individual or group (the franchisee) the rights to operate a business under the franchisor’s established brand and systems. This arrangement allows the franchisee to benefit from the franchisor’s proven business model, brand recognition, and ongoing support, while the franchisor expands their brand and revenue with reduced capital investment.<\/span>\u00a0<\/span><\/p>\n

As we explore the <\/span>ADVANTAGES AND DISADVANTAGES OF BUYING A FRANCHISE BUSINESS<\/strong>, we will assume that the franchise business you are buying has been operating and is profitable (as in this is not a new site, but an existing site). Let\u2019s compare the advantages and disadvantages of buying a franchise vs. buying an established business that is not part of a franchise.<\/span>\u00a0<\/span>[\/vc_column_text][\/vc_column][\/vc_row][vc_row type=”in_container” full_screen_row_position=”middle” column_margin=”default” column_direction=”default” column_direction_tablet=”default” column_direction_phone=”default” scene_position=”center” left_padding_desktop=”100″ constrain_group_2=”yes” right_padding_desktop=”100″ text_color=”dark” text_align=”left” row_border_radius=”none” row_border_radius_applies=”bg” overflow=”visible” overlay_strength=”0.3″ gradient_direction=”left_to_right” shape_divider_position=”bottom” bg_image_animation=”none” gradient_type=”default” shape_type=””][vc_column column_padding=”no-extra-padding” column_padding_tablet=”inherit” column_padding_phone=”inherit” column_padding_position=”all” column_element_direction_desktop=”default” column_element_spacing=”default” desktop_text_alignment=”default” tablet_text_alignment=”default” phone_text_alignment=”default” background_color_opacity=”1″ background_hover_color_opacity=”1″ column_backdrop_filter=”none” column_shadow=”none” column_border_radius=”none” column_link_target=”_self” column_position=”default” gradient_direction=”left_to_right” overlay_strength=”0.3″ width=”1\/1″ tablet_width_inherit=”default” animation_type=”default” bg_image_animation=”none” border_type=”simple” column_border_width=”none” column_border_style=”solid”][divider line_type=”Full Width Line” line_thickness=”5″ divider_color=”extra-color-3″ custom_height=”10px”][\/vc_column][\/vc_row][vc_row type=”in_container” full_screen_row_position=”middle” column_margin=”default” column_direction=”default” column_direction_tablet=”default” column_direction_phone=”default” scene_position=”center” left_padding_desktop=”100″ constrain_group_2=”yes” right_padding_desktop=”100″ left_margin=”50″ constrain_group_8=”yes” right_margin=”50″ text_color=”dark” text_align=”left” row_border_radius=”none” row_border_radius_applies=”bg” overflow=”visible” overlay_strength=”0.3″ gradient_direction=”left_to_right” shape_divider_position=”bottom” bg_image_animation=”none” gradient_type=”default” shape_type=””][vc_column column_padding=”no-extra-padding” column_padding_tablet=”inherit” column_padding_phone=”inherit” column_padding_position=”all” column_element_direction_desktop=”default” column_element_spacing=”default” desktop_text_alignment=”default” tablet_text_alignment=”default” phone_text_alignment=”default” background_color_opacity=”1″ background_hover_color_opacity=”1″ column_backdrop_filter=”none” column_shadow=”none” column_border_radius=”none” column_link_target=”_self” column_position=”default” gradient_direction=”left_to_right” overlay_strength=”0.3″ width=”1\/1″ tablet_width_inherit=”default” animation_type=”default” bg_image_animation=”none” border_type=”simple” column_border_width=”none” column_border_style=”solid”][vc_column_text text_direction=”default”]\n

What <\/span>ar<\/span>e<\/span> the ADVANTAGES <\/span>of buying a franchise<\/span> business<\/span>?<\/span><\/span><\/h2>\n

 <\/p>\n

1.The franchise (hopefully) is <\/span>TRIED AND TESTED.<\/span><\/b> You can buy into something that works and get to miss the start-up stage.<\/span>\u00a0<\/span><\/p>\n

2.<\/span><\/b>BRAND RECOGNITION AND MARKETING DEPTH<\/strong><\/p>\n

    \n
  1. \n
      \n
    1. This means the phone should be ringing!\u00a0<\/span>\u00a0<\/span><\/li>\n
    2. You should expect material uplift in traffic\/sales when part of a franchise<\/span>\u00a0<\/span><\/li>\n
    3. People trust brands. If your brand has a good reputation, then all the better<\/span><\/li>\n
    4. The franchise is doing the marketing heaving lifting for you, allowing you to focus on running the business<\/li>\n<\/ol>\n<\/li>\n<\/ol>\n

      3.<\/span><\/b>SUPPORT AND TRAINING
      \n<\/strong>You should receive significant support across many facets of the business. Training should also be significant and give you and the staff (and thus business) a competitive advantage. Should include:<\/span>\u00a0<\/span><\/p>\n

        \n
      1. \n
          \n
        1. Systems\/Processes<\/span>\u00a0<\/span><\/li>\n
        2. How to run the business \u2013 these covers everything from greeting the customers to collecting money<\/span>\u00a0<\/span><\/li>\n
        3. Software<\/span>\u00a0<\/span><\/li>\n
        4. Accounting\/Payroll<\/span>\u00a0<\/span><\/li>\n
        5. Staff\/HR support<\/span>\u00a0<\/span><\/li>\n<\/ol>\n<\/li>\n<\/ol>\n

          4. SYSTEMS AND PROCESSES.
          \n<\/span><\/b>They should be efficient and well-worn processes that save time and money<\/span><\/p>\n

          5. BENCHMARKING.
          \n<\/span><\/b>You should have excellent insights to what similar franchisees are doing and how you can improve your business<\/span><\/p>\n

          6.<\/span><\/b>MARKET INSIGHTS AND COMPETITIVE
          \n<\/strong>Your franchise should be undertaking market research, know what customers want and value and keep you a step ahead of the competition\u00a0<\/span>\u00a0<\/span><\/p>\n

          7. BUYING POWER
          \n<\/span><\/b>Your franchise should have the best products at the best price and be constantly negotiating on your behalf for this.<\/span>\u00a0<\/span><\/p>\n

           [\/vc_column_text][\/vc_column][\/vc_row][vc_row type=”in_container” full_screen_row_position=”middle” column_margin=”default” column_direction=”default” column_direction_tablet=”default” column_direction_phone=”default” scene_position=”center” left_padding_desktop=”100″ constrain_group_2=”yes” right_padding_desktop=”100″ text_color=”dark” text_align=”left” row_border_radius=”none” row_border_radius_applies=”bg” overflow=”visible” overlay_strength=”0.3″ gradient_direction=”left_to_right” shape_divider_position=”bottom” bg_image_animation=”none” gradient_type=”default” shape_type=””][vc_column column_padding=”no-extra-padding” column_padding_tablet=”inherit” column_padding_phone=”inherit” column_padding_position=”all” column_element_direction_desktop=”default” column_element_spacing=”default” desktop_text_alignment=”default” tablet_text_alignment=”default” phone_text_alignment=”default” background_color_opacity=”1″ background_hover_color_opacity=”1″ column_backdrop_filter=”none” column_shadow=”none” column_border_radius=”none” column_link_target=”_self” column_position=”default” gradient_direction=”left_to_right” overlay_strength=”0.3″ width=”1\/1″ tablet_width_inherit=”default” animation_type=”default” bg_image_animation=”none” border_type=”simple” column_border_width=”none” column_border_style=”solid”][divider line_type=”Full Width Line” line_thickness=”5″ divider_color=”extra-color-3″ custom_height=”10px”][\/vc_column][\/vc_row][vc_row type=”in_container” full_screen_row_position=”middle” column_margin=”default” column_direction=”default” column_direction_tablet=”default” column_direction_phone=”default” scene_position=”center” left_padding_desktop=”100″ constrain_group_2=”yes” right_padding_desktop=”100″ left_margin=”50″ constrain_group_8=”yes” right_margin=”50″ text_color=”dark” text_align=”left” row_border_radius=”none” row_border_radius_applies=”bg” overflow=”visible” overlay_strength=”0.3″ gradient_direction=”left_to_right” shape_divider_position=”bottom” bg_image_animation=”none” gradient_type=”default” shape_type=””][vc_column column_padding=”no-extra-padding” column_padding_tablet=”inherit” column_padding_phone=”inherit” column_padding_position=”all” column_element_direction_desktop=”default” column_element_spacing=”default” desktop_text_alignment=”default” tablet_text_alignment=”default” phone_text_alignment=”default” background_color_opacity=”1″ background_hover_color_opacity=”1″ column_backdrop_filter=”none” column_shadow=”none” column_border_radius=”none” column_link_target=”_self” column_position=”default” gradient_direction=”left_to_right” overlay_strength=”0.3″ width=”1\/1″ tablet_width_inherit=”default” animation_type=”default” bg_image_animation=”none” border_type=”simple” column_border_width=”none” column_border_style=”solid”][vc_column_text text_direction=”default”]\n

          What are the DISADVANTAGES <\/span>of buying a franchise<\/span>?<\/span><\/span>\u00a0<\/span><\/span>\u00a0<\/span><\/h2>\n

           <\/p>\n

          1. FRANCHISE FEES<\/span><\/b>
          \nW<\/span>ithout a doubt, a big consideration. Many franchisees will at some stage ask the question \u201cwhat is the franchisor doing for their money\u201d! You need to understand the fees and obligations under the franchise agreement.<\/span><\/p>\n

          2. What are the <\/span>ONGOING OBLIGATIONS OF THE FRANCHISE AGREEMENT<\/strong>?<\/span><\/b>
          \nYou may be required to invest money every so often or if there is a brand or similar change, invest to update this at your store.<\/span><\/p>\n

          For example, a client of ours had not longed owned a franchised gym, when the brand went through an update on the type of equipment they used, requiring the new owner to invest in a complete new fit out of gym equipment \u2013 a costly exercise!<\/span><\/p>\n

          3. You have <\/span>LITTLE AUTONOMY OR INDEPENDENCE<\/strong>
          \nA franchisor will want tight control on what you sell, for what price, where you can buy products from, the systems you use, etc. Even if you may have found a better way or a cheaper substitute product, it may be difficult to impossibly to make a change. You really need to accept the lack of autonomy you will have in how the business is operated. You need to appreciate that the franchisor really wants you to be like an employee and follow the rules.\u00a0<\/span>\u00a0<\/span><\/p>\n

          4. TERRITORY AND CUSTOMER LIMITATIONS<\/span><\/b>
          \nThis can limit the growth of a franchisor and under the terms of the agreement, can become more oppressive as more franchisees come into the market. You may initially be enjoying a greater territory or freedom in where you can sell and to whom, which can over time reduce. This can limit the ultimate growth potential. You may inadvertently find yourself competing with the same franchise or a franchise owned store that has recently opened.\u00a0<\/span>\u00a0<\/span><\/p>\n

          5. RESTRICTIONS ON SELLING<\/span><\/b>
          \nYou need to understand the agreement fine print. You may be limited to whom you can sell too, and the franchisor will likely have the final say\/approval on who can be a franchisee.\u00a0<\/span>\u00a0<\/span>\u00a0<\/span><\/p>\n

          6. BUSINESS REPUTATION RISK<\/span><\/b>
          \nOne in all in, if a franchise receives bad press, then this will taint everyone associated and may drastically reduce the value of your business, even when your business is still performing well.\u00a0<\/span>\u00a0<\/span>[\/vc_column_text][\/vc_column][\/vc_row][vc_row type=”in_container” full_screen_row_position=”middle” column_margin=”default” column_direction=”default” column_direction_tablet=”default” column_direction_phone=”default” scene_position=”center” left_padding_desktop=”100″ constrain_group_2=”yes” right_padding_desktop=”100″ text_color=”dark” text_align=”left” row_border_radius=”none” row_border_radius_applies=”bg” overflow=”visible” overlay_strength=”0.3″ gradient_direction=”left_to_right” shape_divider_position=”bottom” bg_image_animation=”none” gradient_type=”default” shape_type=””][vc_column column_padding=”no-extra-padding” column_padding_tablet=”inherit” column_padding_phone=”inherit” column_padding_position=”all” column_element_direction_desktop=”default” column_element_spacing=”default” desktop_text_alignment=”default” tablet_text_alignment=”default” phone_text_alignment=”default” background_color_opacity=”1″ background_hover_color_opacity=”1″ column_backdrop_filter=”none” column_shadow=”none” column_border_radius=”none” column_link_target=”_self” column_position=”default” gradient_direction=”left_to_right” overlay_strength=”0.3″ width=”1\/1″ tablet_width_inherit=”default” animation_type=”default” bg_image_animation=”none” border_type=”simple” column_border_width=”none” column_border_style=”solid”][divider line_type=”Full Width Line” line_thickness=”5″ divider_color=”extra-color-3″ custom_height=”10px”][\/vc_column][\/vc_row][vc_row type=”in_container” full_screen_row_position=”middle” column_margin=”default” column_direction=”default” column_direction_tablet=”default” column_direction_phone=”default” scene_position=”center” top_padding=”0″ bottom_padding=”69″ left_padding_desktop=”100″ constrain_group_2=”yes” right_padding_desktop=”100″ left_margin=”50″ constrain_group_8=”yes” right_margin=”50″ text_color=”dark” text_align=”left” row_border_radius=”none” row_border_radius_applies=”bg” overflow=”visible” overlay_strength=”0.3″ gradient_direction=”left_to_right” shape_divider_color=”#f6f6f6″ shape_divider_position=”bottom” shape_divider_height=”40%” bg_image_animation=”none” gradient_type=”default” shape_type=”speech”][vc_column column_padding=”no-extra-padding” column_padding_tablet=”inherit” column_padding_phone=”inherit” column_padding_position=”all” column_element_direction_desktop=”default” column_element_spacing=”default” desktop_text_alignment=”default” tablet_text_alignment=”default” phone_text_alignment=”default” background_color_opacity=”1″ background_hover_color_opacity=”1″ column_backdrop_filter=”none” column_shadow=”none” column_border_radius=”none” column_link_target=”_self” column_position=”default” gradient_direction=”left_to_right” overlay_strength=”0.3″ width=”1\/1″ tablet_width_inherit=”default” animation_type=”default” bg_image_animation=”none” border_type=”simple” column_border_width=”none” column_border_style=”solid”][vc_column_text text_direction=”default”]Buying a franchise offers a mix of opportunities and challenges. On the one hand, you gain access to a tried-and-tested business model, brand recognition and robust support systems, all of which can provide a strong foundation for success. On the other hand, the costs and restrictions imposed by the franchise agreement can limit your autonomy and growth potential. <\/span><\/p>\n

          Understanding both the advantages and disadvantages of buying a franchise is crucial before making a decision. By carefully weighing these factors and seeking professional advice, you can determine whether a franchise is the right business structure for your goals and circumstances.<\/span>\u00a0<\/span>[\/vc_column_text][\/vc_column][\/vc_row][vc_row type=”in_container” full_screen_row_position=”middle” column_margin=”default” column_direction=”default” column_direction_tablet=”default” column_direction_phone=”default” bg_color=”#f6f6f6″ scene_position=”center” top_padding=”50″ constrain_group_1=”yes” bottom_padding=”50″ left_padding_desktop=”100″ constrain_group_2=”yes” right_padding_desktop=”100″ left_margin=”150″ constrain_group_8=”yes” right_margin=”150″ text_color=”dark” text_align=”left” row_border_radius=”none” row_border_radius_applies=”bg” overflow=”visible” overlay_strength=”0.3″ gradient_direction=”left_to_right” shape_divider_color=”#f6f6f6″ shape_divider_position=”bottom” shape_divider_height=”40%” bg_image_animation=”none” gradient_type=”default” shape_type=”speech”][vc_column column_padding=”no-extra-padding” column_padding_tablet=”inherit” column_padding_phone=”inherit” column_padding_position=”all” column_element_direction_desktop=”default” column_element_spacing=”default” desktop_text_alignment=”default” tablet_text_alignment=”default” phone_text_alignment=”default” background_color_opacity=”1″ background_hover_color_opacity=”1″ column_backdrop_filter=”none” column_shadow=”none” column_border_radius=”none” column_link_target=”_self” column_position=”default” gradient_direction=”left_to_right” overlay_strength=”0.3″ width=”1\/1″ tablet_width_inherit=”default” animation_type=”default” bg_image_animation=”none” border_type=”simple” column_border_width=”none” column_border_style=”solid”][vc_column_text text_direction=”default”]At Rogerson Kenny Business Accountants, we pride ourselves on being experts in business advice and strategy. Whether you\u2019re considering buying a franchise, starting a new venture, or need guidance on optimising your existing business structure, our team is here to support you every step of the way. <\/span>\u00a0<\/span><\/p>\n

          With years of experience and a deep understanding of the complexities involved in business decisions, we provide tailored solutions that align with your goals. Trust us to help you make informed decisions and drive your business towards long-term success.<\/span>\u00a0<\/span>[\/vc_column_text][\/vc_column][\/vc_row][vc_row type=”full_width_background” full_screen_row_position=”middle” column_margin=”default” column_direction=”default” column_direction_tablet=”default” column_direction_phone=”default” bg_color=”#f6f6f6″ scene_position=”center” top_padding=”70″ bottom_padding_tablet=”50″ top_padding_phone=”30″ bottom_padding_phone=”50″ text_color=”dark” text_align=”left” row_border_radius=”none” row_border_radius_applies=”bg” overflow=”visible” class=”banner-bg-image” overlay_strength=”0.3″ gradient_direction=”left_to_right” shape_divider_color=”#ffffff” shape_divider_position=”top” shape_divider_height=”15%” bg_image_animation=”none” shape_type=”fan” gradient_type=”default”][vc_column column_padding=”no-extra-padding” column_padding_tablet=”inherit” column_padding_phone=”inherit” column_padding_position=”all” column_element_direction_desktop=”default” column_element_spacing=”default” desktop_text_alignment=”default” tablet_text_alignment=”default” phone_text_alignment=”default” background_color_opacity=”1″ background_hover_color_opacity=”1″ column_backdrop_filter=”none” column_shadow=”none” column_border_radius=”none” column_link_target=”_self” column_position=”default” gradient_direction=”left_to_right” overlay_strength=”0.3″ width=”1\/3″ tablet_width_inherit=”default” animation_type=”default” enable_animation=”true” animation=”slight-fade-in-from-bottom” animation_easing=”default” bg_image_animation=”ro-reveal-from-top” border_type=”simple” column_border_width=”none” column_border_style=”solid” column_padding_type=”default” gradient_type=”default”][image_with_animation image_url=”8422″ image_size=”full” animation_type=”entrance” animation=”None” animation_movement_type=”transform_y” hover_animation=”none” alignment=”” border_radius=”none” box_shadow=”none” image_loading=”default” 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gradient_type=”default”][vc_custom_heading text=”Buying a Business: Your essential guide.” font_container=”tag:h2|text_align:left|color:%23495a6f” use_theme_fonts=”yes” css_animation=”none”][vc_custom_heading text=”We’ve created this valuable 10 step checklist to guide you through the initial stages of assessing a potential business opportunity” font_container=”tag:h3|font_size:24px|text_align:left|color:%23495a6f” use_theme_fonts=”yes” css_animation=”none”][vc_column_text css_animation=”none” el_class=”help_list”]Designed to be thought-provoking, it helps you identify issues and opportunities in a business while covering essential operational and performance considerations, all backed by our business advisor insights.[\/vc_column_text][vc_raw_html]JTNDZGl2JTIwY2xhc3MlM0QlMjJrYXJ0cmFfb3B0aW5fY29udGFpbmVyMzY2NjBlNTk4NTZiNGRlNThhMjE5YmNmNGUyN2ViYTMlMjIlM0UlM0MlMkZkaXYlM0U=[\/vc_raw_html][vc_column_text css_animation=”none” el_class=”help_list”]With our business advice, you’ll have the support and knowledge you need to make informed decisions, maximise success and drive your enterprise forward.[\/vc_column_text][vc_raw_js]JTVCd3Bjb2RlJTIwaWQlM0QlMjI4OTUwJTIyJTVE[\/vc_raw_js][\/vc_column][\/vc_row][vc_row type=”full_width_background” full_screen_row_position=”middle” column_margin=”default” column_direction=”default” column_direction_tablet=”default” column_direction_phone=”default” bg_color=”#495a6f” scene_position=”center” top_padding=”60″ bottom_padding=”70″ top_padding_tablet=”60″ bottom_padding_tablet=”60″ top_padding_phone=”50″ bottom_padding_phone=”50″ text_color=”dark” text_align=”center” row_border_radius=”none” row_border_radius_applies=”bg” overflow=”visible” overlay_strength=”0.3″ gradient_direction=”left_to_right” shape_divider_position=”bottom” bg_image_animation=”none” shape_type=””][vc_column column_padding=”no-extra-padding” column_padding_tablet=”inherit” column_padding_phone=”inherit” column_padding_position=”all” 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