Throughout the roller coaster of a year that was 2020, you might have discovered that some jobs are not secure when the economy takes a hit. Some are secure, but require rapid change, especially if you don’t own the business or have much control over what happens. For many, 2021 is a good year to start a business, or at least start the branch of a business. Franchise ownership offers some unique advantages to business ownership or even working full time for a company. We will explore a few reasons in this article:
Startup is Easier
We’d hate to start our article with some negative information about business ownership, but some stats might help: 20% of small businesses fail or close in the first year. Half are closed within the first five years. Failure rates don’t change that much whether the economy is doing well or poorly. The overall statistic simply reflects that starting a small business is very hard, especially when you do it on your own. Establishing an innumerable number of things from a good reputation to marketing, a place to do your work, and having items or skills ready can be overwhelming.
Franchises are significantly easier to start. Franchises like restaurants often have proven training systems, recipes, and a reputation you can continue to build on. Buying a franchise is also significantly less risky than starting your own business because all of the above are mostly in place rather than requiring you to build everything yourself. Your average franchise restaurant has a tried and true training system, mostly pre designed recipes, and a look and style that you don’t really have to tinker with to create the same feeling for customers when they walk or drive into your location.
An Enormous Variety
Franchises are available in nearly every business category. Want to start your own tax business? You can do that. Believe in being extra clean and tidy and helping others maintain their home? You could buy a franchise of a home or vehicle cleaner. Have a passion for helping people see? You could buy a franchise for a place like Pearle Vision that offers eye exams, glasses and contacts. Restaurant franchise ownership is also very common and amongst the most profitable options for those with a passion for food and customers. Our point is, there are few limits to the kind of franchise you can own. Someone has done much of the work for you to earn customer recognition of a name, and that’s a great start.
You don’t particularly need a certain set of skills to own a franchise either. You can hire those and help run the business while learning the business too.
Starting your own non franchise business like a restaurant means doing accounting, marketing, advertising, hiring, cooking, paperwork, cleanup and a large list of things that you will be learning on the fly. If you are a jack of all trades, that’s awesome for you. A restaurant franchise like McDonald’s or Wendy’s handles much of the marketing for you and takes care of much of the paperwork. You can do the parts you are good at, whether it’s managing people in the restaurant, cooking, or being more strategic.
Did the business you work for, or own, have major setbacks and layoffs in 2020? Owning a franchise within an “essential business” can be quite helpful. Did you see the lines for fast food when people were unable to eat indoors at restaurants in some states? The owners made money. People will eventually return to gyms in full capacity, and they always have to do their taxes.
You can’t get laid off from your own franchise. You could make less money at certain times of the year, but you own the business and probably won’t need to send out resumes or wait for interviews when things get tough.
A restaurant franchise, especially fast casual or just drive thru, is amongst the most profitable available. Why? It’s very convenient for customers to order online and pick up their food for curbside or walk in, or even have a delivery company help you deliver the food. While many of these options are not free to the restaurant, they open your potential customer base and stabilize your work load.
Getting a bank loan is easier for a franchise owner, in most cases. The franchise can provide business projections based on your area so you can hope to get more favorable terms on a loan, as well as more potential cash to start your business with. A Taco Bell or Anytime Fitness has more name recognition than the business you just started and will get the eyes of more bankers who can compete for your loan.
So what should I buy?
While the answer depends completely on what you want to work with, if your focus is on a profitable business, you can start with the list below from the Associated Press, which details the most profitable businesses from last year. Here is a franchise list:
- Dunkin’ Donuts
- Taco Bell
- Pearle Vision
- Sonic Drive In
- Dream Vacations
- Ace Hardware
- Anytime Fitness
There are a few household names in there. At home businesses that do things like medical transcribing or home care services were not included though they certainly can be profitable.
While we certainly commend you for wanting to start a business, you can be your own boss for the most part with a franchise too. You can build a healthy, profitable business from either fast food or any selection of services or products you yourself are passionate about while receiving some help from the parent company.