Should you franchise with an established brand or a newcomer? If you’ve found the perfect franchise business opportunity, you may not care whether it has been around for two years or for a century; if you’re still scouting around, this might be a factor that helps you decide.
Established franchises that have been in business for years have strong advantages that many future franchisees are looking for in a franchise business. Many well-established franchises have brands with strong name recognition and fan followings that let your new location start strong. On top of having a valuable brand, the franchisors are typically knowledgeable because they’ve been in business for a long time and have a system that works for training and supporting franchisees. The experience can really pay off if you’re an inexperienced business owner looking for a system to follow.
There is a certain amount of security and stability in an established franchise. The franchisors have had time to sort out some of the bumps in the franchise system and that might give you confidence in the franchise system. An established franchisor may also have more of a financial track record and more franchisees for you to talk with.
That being said, not every established franchise has these advantages. Some franchises that have been in business for years don’t have strong franchise systems. Their brands might also not be very well known in your area. Franchisors might even be new to the franchise if the original franchisor merged or sold to another company. An established franchise doesn’t always mean a successful one.
Newcomer franchises can often be just as profitable for their franchisees as established franchises. The experience the franchisors bring, the energy they have, or the ability for the franchise to disrupt the existing market or fill a void can create advantages for an upstart company. Franchisees often get more one-on-one individualized support from new franchises because they have the time to focus their attention more on individual franchisees. Newcomers may have the advantage of being able to reimagine business and change the way things are done more nimbly than venerable businesses.
And let’s face it, getting in on the ground floor can be exciting. The opportunity to work closely with the new franchisor while building something new can be uniquely satisfying. You may have more input than a franchisee with an older company would have, and you’ll certainly be around for more of the thrilling milestones as the company grows.
But newcomers must go through the process of fine-tuning that experienced franchisors have already been through. If you’re not willing to go through that process, a new franchise might not be right for you. There might be more risks with a new franchise business than established franchises because the franchise is untested but the opportunity to get on the ground floor and be a leader in a franchise might be worth it to you.
Take a look at your personal preferences and what kinds of risks you’re willing to take and what kind of relationship you’re looking for with your franchisor. Determining these traits in yourself might be the key to the decision.
Our New Franchise Opportunities section includes some franchises that are just new to America’s Best Franchises, but it also has some new and noteworthy franchise business opportunities. Check it often!