STARTING A FRANCHISE IN THE USA: ADVANTAGES AND DISADVANTAGES

STARTING A FRANCHISE IN THE USA: ADVANTAGES AND DISADVANTAGES

Starting a franchise in the USA: advantages and disadvantages

The United States remains the world's leading economic power, and since the 2008 crisis, the country has returned to growth. Bold individuals will still find opportunities to launch their franchise business. Especially since Uncle Sam's country offers numerous advantages in terms of opportunities, flexibility, labor costs, and administrative simplicity. Investir.Us reviews the pros and cons of franchising in the United States.

advantages disadvantages of the United States franchise

The advantages of franchising in the USA

Relying on a franchise network is reassuring. You're relying on an established network and a recognized brand. You benefit from proven expertise in a packaged form, greatly facilitating your installation thanks to standardized processes. You benefit from training and support throughout your contract: legal, marketing, purchasing, human resources, etc.

Once you're established, you can quickly operate and expand your business. The concept is duplicable (you can even open another business with the same franchise) and, most importantly, it allows you to manage the concept passively, meaning that as a director holding at least 50% of the shares, you can appoint a manager in your business. In addition, if you don't have all the necessary funds to integrate the franchise, it is possible to obtain financing if you are a US resident.

Joining a franchise also gives you visibility into costs and potential profits. Indeed, it's less expensive than going it alone. For example, the price of raw materials is negotiated by the franchise and is therefore less expensive. Additionally, you can rely on other franchisees to share their experiences with you.

Read also: Investing in a franchise to succeed in the United States

The disadvantages of franchising in the USA

There are, however, some constraints to franchising. Indeed, by signing a contract, you are subject to its rules: processes, schedules, products/services, tools, territories, etc. All the terms of the contract appear on the "franchise disclosure document," so you are aware of all the clauses before signing. There are also fees you owe the franchisor. These fees generally cover the marketing costs employed by the franchise.

Choosing a franchise to establish yourself in the United States

Choosing a franchise is one way to obtain an E-2 investor visa. Joining a franchise is reassuring for immigration because there's already a proven track record: customers, employees, return on investment, etc. This is also the case for financial institutions, which are more inclined to lend money for investment.

Franchising is a system adapted to the American market. There are more than 3,500 franchises in 75 different sectors. Each year, franchises generate:

$2 trillion in revenue

500 billion in salaries

55% of retail

Also very important, the average survival rate in the United States for new businesses is less than 20%. While 92% of franchises are still operating after 5 years.

Franchising offers multiple choices in terms of business sectors and territories. You don't depend on experienced employees and you receive support throughout your contract. In addition, interviews are conducted to find the right candidate for the right franchise.

To assist you in your efforts, you can call upon a consultant who will answer your questions and put you in contact with various franchise networks.