If you're considering investing in a franchise but wondering whether you could make more money by starting up on your own, the findings of a new survey by the British Franchise Association (bfa) will be very interesting. According to independently conducted research (carried out by research house BDRC), consumers prefer to buy from franchises.
The survey asked 1,235 UK residents between the ages of 18 and 55: 'If there were two businesses, each selling similar products/service, at similar prices and were equally attractive, which one would you try out first?' A clear 45 per cent said they would first try out a franchise over a non-franchise, while only 23 per cent prefer to use a non-franchised brand.
From the consumer point of view, franchises are valued as being backed by a national brand/organisation (69 per cent agreed), provide product and service uniformity (66 per cent) at a consistent standard (64 per cent). Interestingly, the majority also felt that franchises are more price competitive (60 per cent), keep the money in the local business community (55 per cent), make the customer feel more valued (54 per cent) and provide better service because the consumer is dealing with the owner (53 per cent).
'Consumers are actively opting to purchase the goods and services delivered by the franchise community over other alternatives,' reflects Dan Archer of the bfa. 'It is clear that the public associate franchising with numerous benefits to customers, such as consistency in service levels, competitive prices and customer value through personal dealings with the local owner. Combining corporate style best practice with the enthusiasm of a local owner can be seen to be a recipe for great customer service.'
The results of this survey show that the public's view of franchising is becoming more and more realistic, recognising the fact that franchising bridges the divide between the local business and the national corporation, taking benefits from both. A franchise provides a recognisable brand and product, achieves better prices through the national network's bulk buying and ensure locations conform to set standards of service, just like a national company, but it also puts the profits in the hands of the local businessman, provides a localised service and the owner of the business is more likely to be the manager on the shop floor rather than a faceless base of shareholders.
One more benefit of buying that franchise: you get an exclusive territory. Choose to go it alone and you might find yourself competing against someone else who opted to go the franchise route, and end up losing all your franchise-preferring customers.