Owning a franchise has become a main path for entrepreneurs who want the satisfaction and rewards of owning their own business. According to Statista, it is projected that there will be about 792,000 franchise establishments operating in the U.S. by the end of 2022. And there are about 3,000 brands offering their names and operating systems to interested entrepreneurs.

The Pros and Cons of Owning a Franchise

The pros include not having to start a business entirely from scratch, getting a business with an established brand image and some existing name recognition, being able to operate a business that has a defined operating system, franchisor training and operating support, an existing supply chain with the franchisor’s purchasing power, guidance and assistance with marketing, and, in some cases, franchisor financing assistance.

The cons include high startup costs, needing to pay ongoing royalty payments, understanding all the contractual agreements, being linked to the national reputation of the franchisor, and being required to abide by the franchisor’s rules.

Owning a Franchise: What to Expect

Owning a franchise offers many benefits, but like undertaking any business opportunity, there are some risks, and success doesn’t come overnight. Here are some things to know:

When choosing a franchise to buy it is important to do plenty of due diligence, so you know what you are getting into. How long has the franchisor been in existence? What is the franchise track record relative to their relationships with existing franchise owners and relative to their sales and profit history? How stable is the franchise?

Understand all the costs involved in owning a franchise.

Know how long the franchise contract will last.

Identify the training and ongoing operating support that will be provided.

Understand the territorial rights that you will be given. Find out how any disputes will be resolved.

Seek Expert Financing Assistance

Contact Monterey Commercial Capital, based in Neptune, NJ for custom financing solutions to meet your needs. We offer a complete spectrum of commercial finance programs to help you succeed.