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Why should I invest in a franchise instead of setting up my own business?
Unfortunately, the statistics show that the overwhelming majority of independent businesses fail within three years. The converse is true in relation to franchising.
Relatively few franchise businesses fail because franchising involves, or should involve, a franchisor not only establishing a successful business, but putting in place the systems that apply to that business and building a recognised brand around those systems.
In other words, franchising is about the licensing of a format, know how and brand that the franchisor is able to prove works and that enables a franchisor to say: “If you follow my system, you will not fail”.
Clearly, how much effort you put in, how good you are at marketing, whether you have a good location and other factors will have an impact on your success - and the franchisor cannot influence that. But taking a franchise gives you the comfort that, unlike non-franchised businesses, you will not fail if you follow the system.
If you are risk averse - and you should be - and have not run your own business before, it’s a no brainer that you should, at least, consider franchising.
John Pratt is senior partner at specialist franchise firm Hamilton Pratt and has advised franchisors for over 25 years.
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