What are the benefits of buying a business-to-consumer franchise?

John Pratt writes:

As with all franchises, you have to ask yourself: Is this the sort of business that interests me?

Are you a people person, because in franchises where customers are consumers and not businesses there will be much more interaction?

With a business-to-consumer franchise, you’re going to have fewer large accounts, so that bad debts will be less of a problem. You’ll not have a big customer getting into financial difficulties and impacting your business by being unable to pay.

Generally, consumers will pay by credit or debit card and will pay before goods or services are supplied rather than have a credit account, which is generally required by businesses.

Here there is, of course, a downside and that is dealing with payment issues with consumers because of the number of accounts may be more time consuming, but increasingly specialist software deals with this aspect of running a franchise.

If you’re a people person and don’t want to expose your business to the negative impact of a large customer not paying, then a business-toconsumer franchise may be for you.

Having said that, during the period of COVID lockdowns business-to-business franchises have tended to fair better than business-to-consumer ones.

John Pratt is senior partner at specialist franchise firm Hamilton Pratt and has advised franchisors for over 25 years.