Thursday October 21, 2021

updated - October 21, 2021 Thursday EDT

Is investing in a franchise worth it in 2020?

Nov 30, 2020 10:23 PM EST | By Staff Reporter
Is investing in a franchise worth it in 2020?
(Photo : pixabay)

In the modern age, it has arguably never been easier to accumulate and manage wealth. This is despite the relative (and ongoing) stagnation of the living wage in the UK, as individuals turn to activities such as freelancing and financial markets to boost their earnings.

Although the digital age has played a pivotal role in driving individuals to the world's financial markets, however, more traditional investment opportunities such as franchising remain prevalent in 2020.

In this post, we'll ask why investing in a franchise is worth the effort in 2020, so long as you target opportunities in the best and highest growth industries.

1. You'll Invest in a Proven System With an Excellent Rate of Success

The franchise system (which sees established companies license their knowhow, intellectual property and overall brand to franchisees in exchange for a buy-in or profit share).

Over time, this has proved to be an incredibly effective system, and one that's incredibly well-designed and overseen by comprehensive and expert management.

This translates into a relatively high published success rate of around 90%, and while this has been disputed due to the presence of franchise networks that have collapsed relatively spectacularly, there's no doubt that franchising represents a secure investment model that tends to deliver sustained returns over time.

It's certainly more secure than trading assets such as forex or even shares on the financial markets, as while such individuals can use tools like the economic calendar to optimise their activity, the risks and exposure associated with these asset classes remain pronounced.

2. You'll be an Entrepreneur

In many ways, franchising is particularly appealing for individuals with an entrepreneurial spirit whose main objective remains to generate income quickly.

After all, franchisees will operate as entrepreneurs when investing in a proven brand, before effectively running their own business as a way of generating income and ensuring that the venture is possible.

So, although you can rely on comprehensive and ongoing support as a franchisee (we'll have a little more on this below), you'll also create the sense of freedom and autonomy that's synonymous with being a successful entrepreneur.

Make no mistake; the model of this investment opportunity means that you can never be classed as an employee of the franchisor, while you'll also remain responsible for the capital invested and its ability to deliver a return.

3. You'll Benefit from Initial and Ongoing Support


As we've already touched on, franchisees tend to benefit from initial support of experienced management sides and an existing commercial structure, as well as ongoing support throughout their endeavour.

The latter includes features such as site selection, development assistance and continued training for franchisees, which is particularly important in terms of upholding brand values and maintaining the requisite quality of customer service.

To enable this, franchisors generally have a team of experienced professionals to help them provide ongoing and unwavering support, from the initial startup and opening of a particular site to the establishment of a profit-generating entity.

Of course, it can be argued that the quality of support relies entirely on the franchisor and the team of professionals that they choose to employ, but the overwhelming majority choose to invest heavily in this as a way of optimising future success and profits.

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