Franchising As An Industry: The advantage of a franchise
Franchising as an industry first came into its own during the 1930’s and 40’s when several hotels and gas stations decided to begin offering new dealers a comprehensive system of operational and marketing strategies. Since that time the franchising industry has become a national power in America’s economy and a blessing for risk-averse entrepreneurs. Today, franchising is a major force in almost every industry imaginable, accounting for a disproportionate share of retail sales through the U.S. Here are some more interesting statistics gathered from the website of the International Franchising Association.
Why is franchising growing so rapidly? Because franchising works. Franchising allows aspiring business owners to pursue their dreams in an industry that they love while eliminating much of the risk and guesswork that usually accompanies a new business start-up. A franchise provides a proven system, a business model that has worked and is working, usually for tens or even hundreds of other franchise owners.
• Franchises will generate more than 1 trillion dollars in sales this year.
• While franchises only account for 8% of all service business, they claim over 40% of all service-related revenue.
• Franchises currently employ more than 8.5 million Americans.
• According to statistics from the U.S. Department of Commerce, less than 5% of franchise outlets fail annually.
• In a 1991 study of 366 franchise companies opened during the previous 5 years, Arthur Anderson & Company found 86% of the franchise outlets to be still under the same ownership.
• In the same study, Arthur Andersen & Company found 97% of those businesses to be still in business.
• By contrast, according to statistics derived from the U.S. Small Business Administration, during a ten year period, over 60% of non-franchised businesses were ended within the first 6 years due to failure, bankruptcy or retirement.
• People buy franchises because they want to be in business for themselves but not by themselves.
Franchises also provide their franchises with…
• A Proven Concept
• Name Recognition
• An Established Product or Service
• Tools for Success
• Technical, Operational and Managerial Assistance
• Start-Up Assistance and Training
• Standards and Quality
• Buying Power
• Financing Assistance
• Marketing and Advertising Clout
• Public Acceptance
Franchising has become the clear choice for entrepreneurs who acknowledge their need for guidance and who value a long-term plan for business success!