- SME Brief
- Posts
- Franchising: A Promising and Secure Business Venture
Franchising: A Promising and Secure Business Venture
While getting into franchising is considered a promising and secure business venture, it is still a business, which means the same challenges apply.
Many people are drawn to the security of the franchise model. With a franchise comes an established brand name, customer training programmes, not to mention ongoing support and marketing assistance.
What are the benefits of buying a franchise rather than starting your own business?
It is a proven business model – a franchise system is established after a certain number of businesses are successful
It is a well-established product and service known to the market
You are given formal training
Ongoing support in a franchise system
🌻 FEMALE ENTREPRENEURSHIP STORIES OF SUCCESS 🌻
How To Buy A Franchise In South Africa
Starting a franchise is an attractive way to get into business for many entrepreneurs. The great thing about buying a franchise is that you’re investing in an established brand and business model that has been proven to work. This makes opening a franchise slightly less risky than starting a new business from scratch.
Many franchise opportunities exist in South Africa. These vary greatly in cost and can be highly profitable if done right. The cost of buying a franchise purely depends on what franchise you’re buying. Other factors, like the size of the restaurant or restaurant style, will also affect the franchise price.
In this guide, we’ll cover all the basics you need to know about starting a franchise in South Africa. Read more here 👇
New This Week (15 August 2022)
How To Get A Business Loan For A Franchise Business
To apply to become a franchisee, business owners will be required to secure financing to cover the franchise costs upfront. This can include the store set-up costs and joining fees, as well as ongoing fees like monthly royalty fees, marketing fees (as a percentage of turnover) and often a volume-based fee.To access the financing they need, business owners can approach a bank for a loan.
Types of franchise loans available
Prospective franchisees can apply for a variety of loans to cover their franchise costs, including:
Term loans – a lump sum of cash up front, which you then repay, plus interest, in monthly instalments over a set period e.g. 60 months.
Working capital funding – boosts working capital in a business.
Inventory loan – helps businesses to buy stock.
Read the full article below for a list of factors banks will consider before granting a loan.
Need a Bridging Finance? For a Free Quote for Business Funding, visit SME South Africa.
👑 FEMALE ENTREPRENEURSHIP STORIES OF SUCCESS 👑
Your Ultimate Guide to Business Ideas You Can Launch Today
The Best Time to Start a Business is Now
Download 25+ business ideas for all industries in South Africa, including:
Retail
Digital
Food & beverage
Entertainment
Health and Fitness
PLUS Business ideas for the COVID-19 pandemic
