Establishing or buying a business has several benefits, such as allowing you to be your boss or to pursue a passion. However, the primary motivation behind businesses is to make a profit. Buying a franchise can make this process a lot easier. This article will take you through nine financial reasons to buy a franchise in New Zealand.
This publication provides you with the fundamentals for franchising your New Zealand business, including set up, branding and management.
Brand Value
One of the fundamental aspects of franchising is that it offers the franchisee access to an existing brand with loyal customers and public recognition. When you join a franchise network, you can take advantage of an existing brand reputation and ensure prospective customers know exactly who you are and what to expect from your business. This value is priceless and can take years of hard work to build.
Buying Power
Similar to chain stores or national operators, franchise networks have access to buying power. However, independent businesses in New Zealand have minimal access to suppliers of the goods or services they need. This can make running a business complex and more costly.
As part of a franchise system, you will have someone negotiating with suppliers on your behalf. This ensures you get the best terms and prices out of all supplier contracts. This applies not only to initial fit-out purchases but also to the supplies, inventory and anything else needed for day-to-day business operations.
Continue reading this article below the formFinancing Options
Getting a loan from a bank can take time and effort. However, the existence of a tried and tested business, sound operating systems, a visible brand and a franchisor experience is much more appealing to banks than an independent business in the same industry.
Further, showing anticipated costs and projected income – as is sometimes provided by the franchisor in a disclosure document – will make it much easier for banks to put together finance packages to ensure you can easily access funding.
Business Systems
Buying into a well-established business system is one of the main reasons to purchase a franchise. A well-established franchise will have many years of experience across many different outlets. In addition, it will have developed ways of doing things and managing the business that is efficient, effective and profitable.
A good franchise will help you manage your business well and help you implement systems tailored to your circumstances. In addition, the financial advantage of buying into such established systems is unparalleled.
Benchmarking
One of the main benefits of being a franchisee is being part of a group using a familiar brand and system. However, this will result in different results across each franchise branch. Indeed, through information sharing, you can know how well your business is doing and the areas you can improve.
Minimised Risk
The difficulty of establishing a business from scratch is considerable. The advantage of a franchise is that you can learn from a wealth of experience and knowledge and make this process easier.
While there is always no guarantee of success, the presence of tried and tested operations, a brand and years of experience create a shortcut in establishing a business for franchisees.
Marketing Assistance
The franchise will provide you with marketing assistance through proven tools and strategies for attracting and retaining customers. Usually, staff will help you develop the marketing plans and budgets for your opening and assist you with ongoing marketing efforts.
Most small businesses also have yet to have the opportunity to advertise nationally. However, franchises often can do this, which all franchisees can benefit from.
Real Estate and Fit-Out Assistance
Most franchises have staff or written manuals to help you find an appropriate site for your franchise. They can help you negotiate the best possible deal for a commercial lease. This is an excellent advantage that can keep costs down.
Further, franchise networks can also help you design the layout of the business. This is because franchises often have strict design requirements. You might also have assistance with selecting contractors to do your fit-out.
Key Takeaways
Purchasing a franchise can help the process of making a profit become a whole lot easier. Some key benefits of franchising that contribute to this include the access you gain to:
- brand value;
- buying power;
- financial options;
- business systems;
- benchmarking;
- minimised risk;
- marketing assistance; and
- real estate assistance.
If you need assistance deciding if you should buy a franchise, our experienced franchise lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 0800 005 570 or visit our membership page.
Frequently Asked Questions
One central aspect of franchising is that it offers the franchisee access to an existing brand with loyal customers and public recognition. When you join a franchise, you can take advantage of an editing brand reputation and ensure prospective customers know exactly who you are and what to expect from your business.
Purchasing a franchise can help the process of making a profit a whole lot easier. Some key benefits of franchising that contribute to this include the access you gain to brand value, buying power and established business systems. Further, you likely have better financing options and access to benchmarking. Finally, buying a franchise means you gain marketing and real estate assistance.
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