Is Owning A Franchise Still Profitable in 2020?

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Owning A Franchise

Owning a franchise has always been a profitable business venture. The franchising model has existed in the United States since the 1920s and applies to some of the biggest businesses on the planet! A middle-ground between business ownership and steady employment, franchise ownership is a good move for anyone who wants to be financially successful. And who doesn’t, right?

As a business model, franchising is a work of pure genius. Both for the business owner and the franchise owner, the security, profit margins and expandability of franchising are unforgettably great. Plus, there are even more ways nowadays to gain expert advice, information and support when you’re looking to become a franchise owner. Loyalty Brands, with six brands under the wing, allow you to become a franchise owner with world-class help and knowledge.

What Is A Franchise, And How Do They Work?

A franchise is a business that has multiple outlets under the umbrella of a business name. Think of McDonald’s: McDonald’s is a franchise. McDonald’s restaurants are not all run by Mr. McDonald, but instead are run by franchisees, who run McDonald’s restaurants in different locations around the world. These people do not run the McDonald’s business itself; instead, they trade using the McDonald’s name and products which they are licensed to use.

Some important keywords for understanding franchising are:

  • Franchisor. The franchisor is you, the franchise owner! The franchisor is the business provider, who controls the branding, the marketing, the products, and the designs for the franchise. They then sell franchises to franchisees, who can run branches of the franchise in a specific region.
  • Franchisee. A franchisee is someone who trades their services under the umbrella of a franchise. They do not own the business who provides the brand name, they just use it for their trade.
  • Turnkey Opportunity. A ‘turnkey’ opportunity refers to a franchisee being managed and helped by a business. In theory, the franchisee can show up and ‘turn the key’ in the door and begin their work. The larger business is responsible for most other things; the franchisee is just responsible for trading in that particular place.
  • Franchise Agreement. This refers to the contract which is signed between the franchisee and the business owner. This confirms that the franchisee is allowed to trade using the brand name of the business.
  • Return On Investment (ROI): A formula that allows businesses and franchisees to calculate the profit they will turn, based on how much they invested in the first place.
  • Royalties. Royalties are the amount of money paid by the franchisee back to the business, a.k.a the franchisor, every month. For example, if a franchisee of McDonald’s made $100,000 in one month, gross, they would pay a portion of that directly back to McDonald’s, to pay for the privilege of using the business.

How Is Owning A Franchise Different To Owning A Business?

This is a very common question! Starting your own business is a very attractive enterprise, however, it comes with high risks. Starting a business from scratch means that you have very little support from outside sources; if the business fails, there isn’t much backup for you or your staff. This is the reason many businesses fail in their first few years - new businesses are weak structures, and it can fall down at any time. Although you get full creative control, if you fail, there’s nobody there to catch you.

Owning a franchise, however, is much like owning your own business, but with a few changes. Instead of going out into the world of business alone, you enter with the support of an already-established business that has achieved great profit and experience. Plus, there are businesses whose sole aim, like Loyalty Brands, is to help you become a franchise owner and achieve your dreams.

What Are The Benefits Of Being A Franchise Owner?

There are so many incredible benefits of owning a franchise. Just a few of the best things about this enterprise are:

  • Support. Starting your own business is very, very risky; on the other hand, investing in a franchise is much less so. The franchisor is already a successful business who are now expanding their services out so that more people can access them. For example, First Choice is a business sales company that operates in Nevada. If you have business sales experience and you want to run a business of your own like this, becoming involved in their business is a much safer option than starting out on your own. You get amazing support, expertise, and financial security.
  • Profit. Of course, the question on everyone’s lips is: what about the money? Yes, it’s undeniable that if you run your own business that turns out successful, the profits are yours to keep. However, the likelihood of turning a great profit on a small business is pretty small. Being a franchise owner is like a perfect halfway house between running your own business, and being employed. You are the boss, you have some control over how things are run, and you turn a great profit because you’re a part of a reputable business. You will pay royalties to the company that you’re a part of; however, you can rely on consistent profitable income by being a franchisee.
  • Potential to expand. If you become a franchise owner, there is ample opportunity for expansion. If you are successful as a franchise owner, you can invest in another; many people are incredibly successful when they use this model. Building your own wealth without the responsibility of an entire business on your shoulders is one of the most innovative systems that exist in business.
  • Less Responsibility. When you are a franchise owner, you earn profit and experience like a business owner, without the downfalls of business-owning responsibility. If you own a business, all problems come directly back to you. As a franchisee, you work within the guidelines of another brand; this means that you are not responsible for the business’ losses on the whole.

Examples Of Successful Franchising With Loyalty Brands!

There are so many examples worldwide of successful franchises. From the household names like McDonald’s to the less well known but equally viable businesses, whatever your field of expertise, there are franchising options for you!

ATAX Tax Preparation, the fastest-growing segment in the tax business, is a bilingual Latino tax service. This franchisor has successfully helped Latino people in the USA with immigration; driver's license assistance; notary services and insurance analysis!

LeTip, a self-described turnkey business opportunity, allows its users to successfully network their business and excel in B2B relationships. Becoming a franchise owner in this business has never been easier than now, with exceptional oversight from Loyalty Brands, you are in amazing hands.

Loyalty Business Services helps small businesses grow into their full potential, offering expertise, customer service, and guidance to small business owners.

Loyalty Trade Exchange, a top trading company who allow their customers to safely and successfully excel in the barter exchange industry!

First Choice allows you to become a business star in no time at all. Providing diverse, thorough training to all their agents, you can count on First Choice!

Why Own A Franchise in 2020?

2020 has been a turbulent time, both for human life and for the economy. Covid-19, alongside protests and serious political upheaval, has made the economic credibility of the United States challenging for all. Starting a business during Covid-19 might seem like the last thing on your mind. However, the time for investment, believe it or not, is right now. Investing your money in a franchise at this time can actually benefit you in the long run; low competition and increased free time of most people are both contributing factors to this!

Owning a franchise in 2020 provides the security that starting a business cannot. Starting a business is always a risk, but in the current economic climate, it is even more difficult to successfully set up a new enterprise. Owning a franchise, on the other hand, can create wealth for you and your family, without the cliff-edge feeling of a standalone business.

Buying into a business with a proven track record allows you to have confidence in your investment. Knowing that this business has been successful; that it has been expanded before; that it has access to first-class legal advice; and that it is already well-known is a great source of comfort when taking this leap.


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