One way that we can use to increase our assets and wealth is by investing. Maybe you are already familiar with the word investment, many of you who already understand what investment is and even many of you who may have been directly involved in investing. Investment is indeed one of the ways that are often chosen by people because it is an easy and definitely profitable way to increase assets or wealth in the future. There are many types of investments that exist today, ranging from investment in real estate or property, investment in gold, to franchise investment. For those of you who want to open a franchise to be used as an investment, is that the type of investment that is good for you? Check out the full review below!
What is investment?
Before knowing whether the franchise business suits you or not this time we will provide important information to you about investment because there may still be many people who do not know what investment is so that they will be confused if they follow this article. Broadly speaking, investment is one method that we can do to get profits in the future, the way is to invest money and capital in the project or company. So that in the future we will get profits or income.
Then is investment risk? Yes, indeed there are some investments that have a high enough risk and also need substantial funds to start, but what you need to remember is that investment is one thing that is different from gambling, which if gambling might be a full risk we can lose. But not with investment because even though it may have risks but at least there is still our money back or if we still receive profits even though there may be small amounts. This investment requires techniques too so you don’t just think if you’re lucky. Usually to find the right investment, you can consult the financial planner or financial advisor.
Then what is a franchise?
Now that you all know clearly what investment is, investment also has many types as we mentioned above. One type of investment that is often asked by people is franchise investment. Before discussing about this type of investment, we will provide you understanding of the definition of the franchise so you can understand what a franchise is.
According to Investopedia, franchising is a license that can be obtained from the original owner of the franchise so that it allows us to know a lot of access to knowledge, processing, and business brands to enable other parties to sell the product or service these services under the same brand name. In return for a franchise, the party is usually required to pay an initial fee or it may be used to pay an annual license. If you want to start a business easily then this franchise is the right solution, because by setting up a franchise we are just like building a business from a business that has already been established. But it’s not as easy or instant as it is to set up a franchise because in essence, we are just building a business starting from the beginning up, but the difference is we have built this business in a successful business.
So what are some examples of franchises that might be popular in this world? No need to look for it far away, maybe you already understand, not McDonald’s? Then Wendy? Which is a fast food company that opens a franchise? In addition, there are many other franchise companies such as supermarkets or minimarkets that we often find near our home area. Now you understand what business or investment in a franchise is not?
How about franchise investment?
The next thing you should know about franchising is about the investment. Maybe some of you only know if investment can only be done on real estate or something like that, even though this franchise is also included in the type of investment that is quite profitable and starts to be looked at by many people. If you choose to take part in a franchise investment, you will do two things: investing and running the business together. For investment, it can be interpreted as the initial capital needed to buy the franchise. After we buy the franchise as we want, we will have a great responsibility to run the franchise operation. In investing in this franchise, we don’t just buy the franchise, we don’t just pay for the franchise name but also manage it.
Advantages and disadvantages of franchise investment
There are many ways that we can do so that we can generate profits in the future, one of which is to invest. If you want to invest, first choose the type of investment that is right for you. If you have enough money or capital but are confused about what to do, we recommend that you choose just a franchise investment. For those of you who are still hesitant to choose a franchise investment this time we will also provide information about the advantages and disadvantages of franchise investment: –
Advantages of investing in a franchise:
- It has been known to the public
Compared to other investments, this type of franchise investment is easier and not too risky. One of the advantages of this investment or franchise business is that it has become widely known to the public so it tends to be easier to market. So that we do not need to spend more money or energy to introduce our brand to the community because it already has a name. This is far easier than building a new business.
- Potential to generate substantial
profits The second advantage that can be obtained if we choose this investment business is to have considerable profit potential. So for those of you who want to have a business, this franchise investment is perfect for you. If you can control properly, this franchise investment is one type of investment that can generate quite large and multiple profits.
- Easy to get investors
The second thing that is an advantage of this franchise investment is that it is easier to get investors. Because the franchise usually has a name so it is more popular and known by the public, therefore many investors will be more interested in investing their capital in a franchise than any other business or other type of investment. Besides being easier to get investors, this franchise business is easier in its financial management because usually the financial system has used the method set by the main or central franchise owner so we just have to follow it. No need to regulate the financial system like when opening a new business.
- Have a fairly high level of security
If you want to take part in an investment that does not pose a substantial risk, we recommend that you take part in a franchise investment because this type of investment has a higher security than other types of investment. Bias the main franchise owner or center will provide training related to marketing, marketing methods, and also financial management to investors so that the support and security will be higher. This is included in the franchise package when we first pay.
Lack of investing in a franchise:
- Less control
Even though it has many advantages, investing in this franchise also has disadvantages that you should know. One of the disadvantages of this franchise business or investment is our lack of control. Because as we said above, if the franchise has a main or central franchise owner, so when we agree to invest, all systems will be regulated and determined by the main owner. So that we as investors have limitations in being able to develop a franchise business, even though maybe we have brilliant ideas to increase sales but we still can’t do it because there are several rules and agreements that we agreed upon at first with the main franchise owners so they don’t have the power and control to change it.
- Depending on other franchises Another
disadvantage of this franchise investment is that it depends on other franchises. This is one of the biggest shortcomings of franchise investment because it depends on other franchises. The thing that we focus on is the reputation of the franchise one will affect the other franchises. For example, if a franchise experiences a bad thing that makes its reputation go down, it will also affect other franchises so that you can make your franchise experience the impact. This is because the franchise name is the same and is in one shade so that it can lead to the same perception of the community.
- Have an attachment to suppliers
Another thing that can be one of the drawbacks of following a franchise investment is that this investment has an attachment to suppliers. To get more benefits, of course, we as franchise investors want to find suppliers at low prices so that the benefits that we can get are maximized. But for investment or franchise business the supplier or supplier of goods is usually determined by the main franchise owner so that the kit cannot choose other suppliers that are cheaper. So even though we find other suppliers that are cheaper, we still cannot choose because there are already attachments to the main suppliers.
- Not passive investment The
the disadvantage of franchise investment is that this investment is not part of passive investment. If you choose to take part in a franchise investment, you should not relax, maybe if we follow other types of investments we can relax because they are one type of passive investment. But if you choose to invest in a franchise, it means you have to take care of it, especially at the beginning of the franchise ownership. So we recommend that you think carefully, if you don’t have a lot of time then we recommend that you don’t choose this franchise business because it requires a lot of time for the first time.
That was some information that we shared about the advantages and disadvantages of opening a franchise business or making a franchise investment. The advantages and disadvantages above can be used as a consideration whether you want to go into franchise investment or maybe not.
Is a franchise investment a good investment?
After knowing the advantages and disadvantages of this investment, you may now wonder whether this investment is one type of investment that is good to choose or run? Now we will help you to provide answers so that you can consider whether this business or investment is one of the things that is suitable for you later. Franchise investment is actually good or not determined by yourself. This decision really depends on your personal desires or conditions. Usually people who have large capital will benefit because capital is the biggest determinant in this incestation. Before you decide to choose this investment there are a number of things that you must consider.
The things you have to consider are like time and maybe also the experience you have. If you have a lot of business experience, we recommend that you take part in a franchise investment because if you know how to market it correctly then you can gain a lot of profits. But if until now you still feel confused to choose a franchise investment or other investment, we recommend that you consult with financial advisor or financial planner just because there are some of them who have the task to help clients determine what type of investment is suitable for the type of client finance that is. By using these services then maybe you can help those who are still confused in determining investment.
Now that you know what are the advantages and disadvantages of franchise investment, we recommend that you consider it first so that you don’t experience loss or regret. Hopefully, the article that we provide will be useful and useful for you all!
