Sunday, May 9, 2010

Buying a Franchise

Benefits of Owning a Franchise
Franchises are popular amongst small business owners as well as entrepreneurs and people looking to get out of the corporate “grind”. There is good reason for this, as franchises offer the benefits of business ownership along with the support system and business model of an already successful business. When you take a close look at the benefits that go along with franchise ownership, its no wonder franchises are becoming increasingly popular.

A franchise can be an especially good idea if you want to break into an industry that is extremely competitive, high risk, takes a decent amount of start up capital and definite industry knowledge. One such industry is the real estate industry, specifically real estate investing i.e. home buying or “flipping” houses. This industry is one that almost everyone has thought about getting into at one point in time or the other, but for whatever reason haven’t done it successfully. More than likely that reason (or reasons) is that the field either a) requires to much up front investment b) they don’t have the “know-how” c) its to risky to take on alone or d) they have realized it is HIGHLY competitive and most of the mom and pop investors get eaten alive. However, by purchasing a real estate investment franchise you can virtually eliminate or at least minimize the challenges you face when entering into the real estate investing industry. Real estate investing has probably made more millionaires than any other industry in the world. By following a proven system and having access to the type of support system franchises offer, you have a good chance at following in the footsteps of successful real estate insiders.

Real estate franchises offer a proven business model

Most, if not all, new real estate investors, “flippers” etc. suffer from being overzealous with no proven game plan. A benefit of purchasing a home buying franchise is that you get a proven strategy and business plan. Everything is mapped out for you step by step, for the most part. You actually own your own real estate investing business but enjoy the day to day coaching and insider knowledge that could only otherwise be enjoyed from years and years of experience, brain picking and relationship forming (not to mention falling on you face several hundred times). Plus, franchisors only survive if they make there franchisees successful, which is a definite benefit in and of itself to the prospective franchisee.

Franchises offer name recognition

Real estate investors do not have the huge benefit of name recognition like an established company would. So, someone who wants to go out and start attracting prospective sellers will have a much harder time as a mom and pop type investor who is going at it alone than they would if they had the powerful name of a successful company behind them. Think about…..if you had a $300,000.00 house for sale and you needed to sell it quickly, would you be more likely to sell to Joe Blow mom and pop investor or someone who was with a reputable, established company? Obviously, you are going to go with the reputable company on such an important decision.

Franchises offer proven marketing systems

The lifeline of a real estate investor lies in finding good deals. There is no easy way to find good deals, especially with the industry competition that has flooded the market these days. With franchises, you get the benefit of a proven marketing system. Some franchises, such as those offered by Flanagan Properties, LLC at http://www.luckybuysyuckyhouses.com market through mass media i.e. 30 minute infomercials on major television networks, billboards, :15 and :30 second television commercials, radio spots, billboards, direct mail and more. As a private investor it is very hard to compete with that!

Sales training and support

Real estate franchises (and most other franchises) offer thorough sales training. If you are good at sales anyways, that is a definite bonus. With the help of the trainers you can adopt your life learned sales skills to the home buying industry and excel quickly. A home buying franchise offers you the one on one training that could only otherwise be found by spending tens of thousands of dollars on mentoring programs. Also, with a franchise that mentorship type of program never really ends. Most franchises are offered for 5 or more years, so you are pretty much guaranteed these types of benefits during that whole time.

Franchising makes a lot more sense than just trying it on your own

When you really put the pencil to the paper and figure out your risk vs. reward for starting in the real estate investing business, franchises make the most sense. Ask yourself, how much do I stand to lose by doing it on my own? Franchise fees are not that much and what do you think the likelihood of you succeeding is if you have the benefits of a franchise in your corner? The franchise costs only a small fraction of what it would cost if you just make one or two mistakes on your own. Franchising doesn’t guarantee mistakes wont be made, but it certainly does minimize the risk and hopefully maximize the rewards!

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