Ask the Experts

BRIAN DUCKETT WRITES:
The major benefits are reduction of risk and hitting the ground running with a proven system. The level of benefit will vary with how experienced the franchisor is, how well proven the business format is, and the level of training and support provided for franchisees. If the franchised system has not been properly structured, the concept hasn’t been properly piloted, and the franchisor’s team has not been properly trained in how to recruit, train, monitor and motivate franchisees, then the risk of failure may even be increased.

For a properly prepared franchise however, the risk of failure is very low compared to going into business on one’s own. Imagine an experienced person decides to open a sandwich shop. How do they know what makes a good location, what designs and layouts to use, what the menu should be, where to get the ingredients from, how many staff to employ, what to pay them and what to charge customers? All these questions, and more, will be answered by the franchisor from his experience and the combined experiences of the other franchisees.

Something like 50 per cent of independently started businesses are no longer trading after five years. The figure for franchised outlets is around two per cent a year, so say 10 per cent after five years. However you look at it, that makes becoming a franchisee, as opposed to starting your own business, five times less risky. Back to List