Benefits and Drawbacks of a B2B Franchise

May 12, 2021. Harry Welby-Cooke

Let’s unpack some of the Benefits of a B2B franchise as well as some of the Drawbacks.

As the world’s leading business coaching company, we’re constantly having to remind our clients, and then coach them accordingly, that a business is their chosen vehicle to serve them. A business should not be a trap where one ends up serving the business or becoming a slave to the business. The right business should support you, your dreams, your goals and your future aspirations.

It’s therefore critical to select the right one, that serves you, and then build it accordingly. There are a vast array of different business types to consider across a range of different industries. Today we’re however going to focus on Business to Business (B2B) franchising.

So let’s unpack some of the Benefits of a B2B franchise as well as some of the Drawbacks. The more you’re going in eye open the better.

Benefits

• As Ray Kroc, from McDonalds fame, said: “Franchising is about being in business for yourself but not by yourself.”
• High margins with low costs
• Little to no fixed costs
• Flexible hours
• Transportable
• Easy to transition to a digital world
• Intellectually stimulating
• Aligned to one’s past experience and skills
• Allows one to live a legacy and make an impact
• More flexible than retail franchise models
• Easy to be passionate about
• Continuous growth curve
• Like-minded ‘team’ members and colleagues
• Less competition and less market saturation
• Leverage across the franchise network
• Repeat business and retainer income

Drawbacks

You are the business so if something happens to you the business is at risk. 

• Easily mitigated but still a factor
• Franchises have rules and restrictions
• A brand requires standards, professionalism, and conformity
• No intrinsic value in a location alone
• You’ll need to learn to market and sell
• Less privacy and more transparency
• Very people-focused
• Requires a ‘deeper look in the mirror’ with less place to hide
• Agreements generally favour the franchisor
• It comes with an upfront investment and ongoing costs
• It requires additional time for franchise related support, events
• Still not guaranteed to succeed

Whilst the drawbacks may be easily mitigated, and the benefits aren’t guaranteed, the important part is to be aware of both sides. 

For me, the benefits far outweigh any drawbacks but that’s for you to discover, assess and decide. Where applicable, please make sure you do your homework and definitely engage with the franchisor to ensure the business serves you, your dreams, your goals and your future aspirations.

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