Each year, the popularity of franchising as a business model grows. An increasing number of people are getting involved in franchises to take control of their careers and invest in their futures. But why are a record number of individuals putting their money into franchises rather than the traditional method of growing a business from scratch? Read on to find out more.
What is the Meaning of Franchise?
To understand why franchises are becoming more popular, we must first ask: what is franchise meaning?
In simple terms, a franchise is when a company grants an individual the right to market and/or trade products and services under their name in a specific region or territory. The franchisee has to pay a fee for this right, and once it has been granted, they will have to comply with strict rules regarding the management of their business.
Those investing in franchises often choose to do so because it is seen as a safer investment than growing their own business from scratch. When you strike a deal with a franchisor, you can lean on their experience in the industry and the brand they have already developed. This can make marketing and growth more straightforward than it might otherwise be with a small business.
Why is Franchising Becoming More Popular?
The growth in the industry has been especially pronounced over the past year, largely due to Covid-19. Even at the best of times, starting your own business can be a daunting thing to do. The virus has changed a lot about how we do things in the modern world, and in business, it is no different.
Many businesses struggled during the pandemic, and smaller companies were affected disproportionately without the resources needed to sustain themselves. While franchises were not immune to the financial pressures of the pandemic, in general, they were able to survive better.
A big reason for their increased resilience was the backing of franchisors. The franchisors could provide support to their franchisees in a way that would not be possible for your typical family-owned small business.
While you are certainly your own boss as an owner of a franchise, you are also part of the wider network that is the company you represent. This gave franchise owners a large amount of support at their disposal during the pandemic. This allowed many small business owners involved in franchises to pull through during Covid-19.
Will the Popularity Continue?
Most likely, yes. The economic pressures of the pandemic are not behind us as yet, and so many people are wary of beginning their own business. The resilience seen in the franchising industry during Covid-19 has made this route a more attractive option for many.
Additionally, the pandemic has also led many to question their careers after prolonged periods out of work. This means that people have a greater appetite for running their own business, so it seems likely that franchising will remain a popular option going forward.
Overall, the support network offered by the franchisor, coupled with the economic strain of the pandemic, has contributed significantly to the growth of franchising.
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