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Why Starting a Franchise Might Be a Safe Investment in 2021

Why Starting a Franchise Might Be a Safe Investment in 2021

There are endless options for entrepreneurs looking to start a business. One option that should not be overlooked is buying a franchise. There are some significant advantages to be found in this business niche.

What’s in a Name?

Human beings love and return to the familiar. Buying a franchise makes a new business owner part of something larger, well established, and well known.

In essence, a franchise has built-in customers just waiting for their favorite business to appear closer to home.

Because franchises control the number of their businesses in an area, a new owner can be sure that they have sufficient space to establish their business. Being well-known and being convenient are two different things. Buying a franchise provides both.

Getting Started

Every business has start-up costs. Rent, equipment, remodeling, and a hundred other details that often get forgotten in the excitement of opening day. Until the bills begin to arrive, of course.

A franchise can come with a steep initial fee, but that fee usually offers more than just a roadmap for success. A new owner might see everything from a stable supply chain and discounted equipment to a complete turnkey operation that is set up and ready to go.

Risk Management

A well-established franchise has already ironed out the wrinkles in their business plan. A significant part of the risk in starting a business comes in the planning stages—creating a comprehensive business plan, securing funding for an unproven concept, and generally creating a blueprint for how to take an idea from paper to profit.

With a franchise, a lot of that initial work is already done. The business is already successful and the basic business plan and model are sound. Skipping those early steps in starting a business doesn’t only save time and energy; it gives a new business owner some confidence that the business has good bones.

The very simple truth is that franchises are more likely to succeed than their independent counterparts, making them a safer investment. The more well known the franchise is, the lower the risk.     


Most franchises offer extensive training for new owners so that their business model can be followed properly and effectively. This is a huge benefit to a less seasoned investor who still has a few ropes to learn when it comes to business operations.

Franchise supported staff training decreases the burden on the business owner and is generally highly organized, efficient, and complete. Depending on the size of the business this perk could save the owner hundreds of hours.

A franchise may also offer ongoing guidance and mentorship to a new owner. The goal is for every location of a franchise to succeed, so providing assistance and support is in everyone’s best interest.


If a small business is started from scratch, it can have the best business plan, product, and staff in the world and still fail because of bad or insufficient marketing. Buying a franchise gives the owner access to the marketing skills of a much larger business.

Having a full marketing department in place from day one to assist with everything from coupon printing to digital advertising campaigns gives a new franchise an enormous leg up on its independent competitors.


Buying a franchise can be expensive, just like starting any business. The fees are different, but the need for funding remains. Fortunately for those looking at a franchise, that funding can be easier to secure.

The Small Business Administration has special allocations for franchisees, and even traditional funding can be more forthcoming when the new business has a well-established and successful franchisor.

Who Should Buy a Franchise?

Franchise ownership is not for everyone. Some entrepreneurs are better suited to these opportunities than others.

Good candidates for franchise ownership include investors with a moderate amount of business experience. This franchisee reaps the benefit of the experience of the franchisor, and possible mentorship, as they build their business skills.

Less experienced entrepreneurs should make sure that any franchise they consider offers a high and ongoing level of support for their franchisees.

Potential business owners with specific skill sets may be well suited to franchise ownership. A highly trained mechanic is in an excellent position to own an auto repair franchise. The potential to increase independence and income without the burden of starting from scratch makes a franchise attractive to entrepreneurs with in-demand skills.

Previous owners of small businesses make excellent franchise candidates. They’ve been their own boss and know that freedom comes at a cost. They know the nuts and bolts of business ownership and are ready to hand some of the controls over to the franchisor.

Perhaps the best franchisee candidate is the one with a passion for the business. Whether it’s selling cupcakes, doing taxes, or operating a gym—making sure that the franchise matches the interests of the franchisee is crucial for long term success.

Who Should Not Buy a Franchise?

Experienced entrepreneurs and investors looking for a lot of creative and operational freedom are not the best candidates for buying a franchise. While franchises vary widely, there are always going to be rules and royalty payments. That can feel restricting to someone who really wants to be the boss.

Those with very limited business experience should not jump into any type of new business ownership. Despite the benefits a franchise arrangement can bring, they do not replace a solid knowledge base. Investing in business education is the first, best step in becoming a successful business owner.

The Bottom Line

Buying a franchise can be a solid, safe, lucrative investment for the right entrepreneur.

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