Does Franchising Offer Women a Better Chance to Succeed

Does Franchising Offer Women a Better Chance to Succeed

by Eric Schechterman

The secret is out, the next big thing in franchising is already here….female franchise owners. The numbers tell a story of rapid change. At FranNet, female franchise ownership jumped by 83 percent. Entrepreneur.com reported in a 2018 article that female business ownership jumped by 83 percent between 2011 and 2017. An obvious reason for the shift is a corporate world full of unfair pay gaps, improper workplace environments and an antiquated culture of penalizing women for stepping away from employment in order to raise their family. Franchising has become the answer for the budding and powerful female population.

But why have these women opted for franchising vs. traditional business ownership? It is because the numbers show a higher chance for success.

Research over the years has indicated that the success rate for franchise-owned endeavors is significantly better than the rate for non-franchise-owned small businesses. According to 2019 census data and a study published in the

Journal of Economics & Management Strategy, the two-year success rate of a franchise is about eight percent higher than the independent success rate, and the one-year survival rate for a franchise is about 6.3 percent higher.

When Janine Allis, Boost Juice Founder and Shark Tank investor, spoke to SmartCompany she said, “There’s no question — you’re three times more likely to be successful with a franchise than you are going to be on your own.”

I love data…I love statistics…I can spend all day finding article after article and study after study that have numbers showing that franchising increases your chances for success. That being said, it is not a perfect world, and I am sure one can find data that supports the other side of the argument. Rather than regurgitating numbers and studies, maybe the better question is WHY is there more success or less risk?

The answers are simple…

With a franchise business, you get to enjoy a support system from the start. One of the most common reasons businesses fail is not being able to afford the right team. A non-franchise small business owner may not be able to hire a customer service department, a marketing team, an R&D team, etc. In a franchise model, you have access to all of these services and more from the parent company. Support

You get to research the business’ viability before you start. This is my favorite part of franchising and something that you just can’t get when you start from scratch. When you launch a franchise business, you’ll get information on the financials, meet the management team, speak to existing franchisees who have already run the business, etc. When you invest in a franchise, it’s more of a business decision than a leap of faith when you do the proper research. Research

You are building a business based off a well-established model. This goes beyond just brand recognition and marketing. This also reduces the amount of mistakes a new owner could make. If you are investing in a franchise with 100+ locations, that is 100+ test cases that have been used before you to identify best practices, training, revenue streams, common pitfalls, etc. Proven Success

Financing options are typically offered with banking relationships in place to make funding easier. This is simple. Banks and financing companies love franchise brands and are very hard on independent start-ups for all the reasons discussed above. In most cases, a franchise will have financing relationships in place to make this an easier part of your journey. Financing

Franchises enable you to pinpoint target markets and give you support. We live in a world of data. Franchises use that data today to ensure success. Franchise brands don’t just throw a dart at a board and say “we think one can work here.” There is a reason you might see a Supercuts, GreatClips and SportClips within a mile of each other. It is because the marketing demographics showed those brands that the specific area could support the business model. This is something people often forget. When a franchise says it can work where you are, it is because the income, population, demand and competition in the area all point to the success of your location. Data

It’s a great way to be in business for yourself but not by yourself. This sums up all of the above. Franchising is partnership. You not only have the support of the parent company, you have the support and guidance of all the other franchisees in the system. And remember, the parent company makes money when you make money. They are invested in your success. Partnership

As part of one of the top franchise consulting teams in the country, Eric works closely with clients to understand their goals, values, lifestyle and interests to help coach them through the process of learning about franchising. Eric has worked as the Chief Development Officer for a funding firm focused primarily on funding start-up franchises. He was honored to earn a distinction of Certified Franchise Executive (CFE) by the Board of Governors of the IFA in 2016. Contact Eric at eschechterman@frannet.com