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3 Reasons Why Starting a Franchise Is A Smart FInancial Decision

For many people, the idea of having your own business offers them the freedom and power they’ve always dreamed of in the workforce. However, once the glitz of being your own boss has worn off, the reality of what it takes to be a business owner sets in with all its stresses, burdens and uncertainties. Luckily for some, there is a happy medium: franchising.


Owning a franchise can be a great way for someone to get the feeling of running their own business without being completely on their own in any way, including financially. So if you’re wanting to start your own business but don’t want to take the financial hit of being an individual business owner, here are three financial reasons why starting a franchise is a good idea.

Franchises Generally Have Less Risk Involved

Starting a business of your own requires being comfortable with a huge amount of financial risk. But when you decide to open up a franchise instead, there is generally less risk involved in the process. Ted Johnson of shares that the reason for the reduced amount of risk is because the company you’re franchising with is able to support you. This means you’re able to use their buying power, their connections, their products, and their experience all to your advantage.

Getting Financing Is Often Easier

When starting your own business, you need a hefty amount of financing to even get your feet off the ground. However, if you have bad credit or have had financial problems in the past, getting the financing necessary can be very difficult. However, when Franchising a Business, options for funding can open up immensely.

Not only do banks trust those seeking loans more when they have a franchise to support their business ventures, but many franchisors will also help with the funding as well. According to Caron Beesley, a contributor to the U.S. Small Business Administration, many franchisors are now offering their franchisers financing options, especially if they’re first-time franchisers or have multiple stores with their franchise. These programs make it a whole lot easier to come up with the capital you need to start your business.

All The Legal Legwork Has Already Been Done

If you’re starting a business from scratch, all the pressure’s on you. You’re responsible for 100 percent of what happens or doesn’t happen with your business, including legal work like patents, trademarks and intellectual property rights. This headache is something franchisers don’t have to heal with.

Because you’re coming into an already fully-functioning company, Sara Wilson, a contributor to, reminds us that this work has already been taken care of and you can instantly profit from it. This will put you way ahead of the game compared to others who are just starting a business.

Opening a franchise can be a great way to make money without having to spend too much of your own and risk losing it all. Due to the financial reasons mentioned above, consider looking into what you need to do to start the process of owning your own franchised business.