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Franchises Offer Stability To New Businesses

Written by Ken Gaebler
Published: 3/12/2010

Entrepreneurs seeking an established business model can look to franchising.

Marketing analysts take varying views on franchising. News from the past 14 months, says Entrepreneur magazine columnist Joe Lindenmayer, shows half of franchises succeeding and half struggling. However, Lindenmayer attests, a carefully selected franchise can be one of the safest business investments available to today's entrepreneurs.

Franchise Stability

The primary benefit of entering into a franchise system, says Lindenmayer, is that "the franchisor has a vested interest in the survival of each and every franchise owner and will do all it can to ensure the network's success." In order to ensure that the franchise has the capability to follow through, he suggests thoroughly evaluating its history and current approach.

A franchise should not only have a past that demonstrates strong financial performance, it should have a business model that will stay relevant. Lindenmayer suggests examining its competitors and researching the industry for signs of eventual obsolesence.

The Colarado Springs Gazette recently pointed out that unlike banks, which are frequently reluctant to lend to small businesses, franchises have been offering even better deals to aspiring entrepreneurs. The paper counts available franchises as totaling 3,500.

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