Why Invest in a Franchise Business In The United States?

In my last blog we discussed how the US Chamber of Commerce recently reported that 86% of franchises opened within the last five years were still under the same ownership. Amazing!

So, why do franchise businesses enjoy a much higher success rate than independent businesses in the United States?

First, the US Franchise Industry is highly regulated by the Federal Trade Commission (FTC). I will argue that this is a very GOOD THING! The FTC demands that the franchise industry provide complete transparency to the consumer. This gives the investor confidence that they can make well informed decisions with up to date information. These laws and oversight bring confidence and credibility to the franchise industry and allow entrepreneurs to flourish and grow within their respective systems.

Second, franchise systems require their franchisees to follow systems and processes that are proven to work. In most cases, they have been battle tested and modified to fit the marketplace. As a franchisee you receive training and ongoing support to give you every opportunity to succeed. Sure, some franchisees will fail. However, this is typically because the franchisee failed to follow the system or the recommendations of the franchisor.

Third, you are buying into a brand that is already established. This is very powerful. The ability to advertise and market your business locally with the support of a larger brand brings instant credibility to your business. It enables you to grow within the franchise much faster than trying to establish an unknown brand on your own.

To summarize, within a franchise system, “you are in business for yourself, not by yourself.” The franchise system is a perfect place for aspiring entrepreneurs to achieve personal and professional satisfaction with the opportunity to build significant equity and wealth.

It is important to note that not all franchise businesses are the same. In my next blog I will focus on how to select the right franchise business in the United States.