Franchise Advantages, Opportunities You May Not Want to Pass You By

Jun 18, 2021

Ready to take the franchising route and get a steady income stream? Experts always advise people taking on the reins of a franchise venture to aware of the risks. The coveted rewards will not happen overnight, but with passion, hard work, creativity and capitalization, the investment may pay off. Yet some small businesses fizzle out. Knowing the advantages and disadvantages will help entrepreneurs get off on the right footing.

A franchise is a method of doing business in which a business entity or individual entrepreneur expands by supplying independent business owners with an established business, including its name and trademark. The entrepreneur’s local market knowledge and tapping into what customers want contribute to brisk business.

Why franchise? Most people ask this question. Individuals who have ‘been there, done that’ have many tips and franchising advantages to share. For the franchisor, leveraging off the assets of franchisees helps grow market share and brand equity faster and more effectively.

For the franchisee, topmost franchise advantages include a proven business system (not having to start from scratch). Indeed, a major advantage of a franchise is that much of the groundwork has been done by the franchisor, including sales and promotions.  Products and services have been brought to market, and therefore have a customer base already. All startup costs that come with buying a franchise business are shouldered by the franchisee, and sustaining the business is the key challenge.

Apart from the ability to tap into the franchisor’s collective buying power, franchisees can heed recommendations on where to obtain financing. This kind of franchisor support counts among the advantages of franchising. Because of existing knowledge of the franchisor’s product or service, lenders are sometimes more inclined to loan money to those starting a franchise venture. Hence, if all requirements are met, financing may be easier to secure.

The best franchisors are those who are efficient and forward-looking, yet are able to ensure that expansion or growth is not outstripping their ability to support their franchisees. Rogelio Tapang of CleanWorld said in a webinar that open communication and collaborating with those who know the `ins and outs’ of the business, or the franchisor’s full support – among the usual advantages of franchise operations — can come in handy.

Owning Franchise

In his book, “The Franchise Handbook: Everything You Need to Know About Buying a Franchise,” franchise consultant Mark Siebert dishes out good advice for people seriously considering franchise ownership. He says select one that is a good match to your personal interests and skill set.

You need not be a culinary expert to operate a food kiosk, but the drive and willingness to learn must be there. As Filipino franchise brand Raian’s Takuyaki exclaims, “You don’t have to be great to start but you have to start to be great.” Small entrepreneurs purchasing a franchise will most likely have lean staff and lean management structure, so it pays to be knowledgeable and to be proactive.

“Franchising is… one of the most powerful business expansion strategies in the world today,” Siebert said. The benefits of owning a franchise can outweigh the disadvantages. Nonetheless, before buying a franchise, a look-see at informational tools and vast insights shared by creative and visionary entrepreneurs through webinars will be very helpful. 

For individuals taking the franchise ownership route, networking is key. Among small businesses, an estimated 70 percent fail because they do not seek help from others, and do not recognize nor accept their weaknesses. 

In a recent webinar organized by peer-to-peer funding platform, the advantages of a franchise were shared by couple Daryl & Lyka Bincal of DL Weddings For Less and other successful entrepreneurs. Flexibility or adaptability can help keep a franchise business going. During the pandemic, for instance, the Bincals refocused and adapted to client requirements, and also stepped-up sales and marketing using social media tools.

Zerra Chua of Spring Cleaning Services offers this piece of advice for people keen on entering service-oriented franchises, “If you have an idea and you think there is a market for it, study it and test the waters.” Yes, it is very beneficial to touch base with experienced entrepreneurs and like-minded individuals.

Funding Your Dream Business

Just as one of the biggest reasons’ individuals decide to franchise is money, so is it, in some people’s perception, a setback. Realistically speaking, many people are capable of running a business built on the franchise model and meeting the franchising risks head-on, but lack the capital. A peer-to-peer online facility like bridges the gap and answers the need of entrepreneurs to pursue their dream business.

Entering into a franchise partnership with extends the benefits of owning a franchise to franchisees. There is an array of low-cost franchises ready to go high gear in the Philippines now. The ideal scenario is when interested parties buying franchises have savings and just need to add a little more to complete the startup payments.

Dedicated and hardworking franchisees are materially invested in the success of the operation, and hence may end up operating a unit profitably even after accounting for the things that need to be paid to the franchisor. Those who are able to innovate and keep improving the business also increase the chances of reaping more franchising advantages.

Beyond focusing on being “cash flow-positive,” franchisees are expected to be attuned to customer needs and wants, and to provide excellent service. Some franchise pros and cons, as cited by the Association of Filipino Franchisers Inc., are independence for the franchise owner; trainings provided to enable the franchisee to run the business well; and the huge potential for success of the business model.

Franchise disadvantages include being undercapitalized. Having very limited resources, particularly during the early stage of a franchise venture, need not stop a good franchise venture from soaring.

Apply for a franchise loan with Visit to learn the loanable amounts and requirements.