ParMasters Golf Training Center Franchise
Why Invest In A Franchise?

Why Invest In A Franchise?

Both franchising and the broader business opportunities field involve taking a concept and systematizing the most successful elements, then duplicating this concept. Known as the “turn-key” revolution, this method of growth has literally revolutionized business in the twentieth century.

Properly developed, a franchise opportunity dramatically increases the odds of succeeding in business. In fact, the US Department of Commerce indicates that non-franchised businesses have a whopping sixty-two percent failure rate in their first six years. While the numbers vary, most experts agree that franchising dramatically lowers the odds of failing. This huge difference is due in part to the Franchise’s ability to provide a network of support to the Franchise Owners including bulk buying (helps increase bottom line profits), tested marketing (increases sales by developing a brand name and a consistent marketing image), and using proven methods of running the business. Essentially, the Franchise purchaser is benefiting from the years of experience the Franchisor typically offers them, without having to go through the same growing pains.

What are the benefits to a Franchisee?

To the Franchisee, the benefits of owning a Franchise far outweigh any initial Franchise fee. For one, the success rate of Franchised businesses is more than double that of individually owned and operated businesses. Franchisors often provide a service where none previously existed and increased service where existing service may have been inadequate. Thus, greater efficiency through sophisticated marketing techniques, technological development and standardization, quality control and production automation can be established.

Franchises also provide the opportunity for business ownership to those of limited capital who might not qualify as competitive independent entrepreneurs. Proven systems offer competitive advantages especially when they are combined with Franchisor training, site selection assistance, national purchasing power, well known names and logos and continuous management assistance.

The combination of these two tested and proven business systems creates an explosively strong concept around which to form the foundation for a "system of success".

Market Size

According to Entrepreneur magazine, business-format opportunities grew at a rate almost double that of the economy as a whole, even throughout the "recession" of the late 1980's. American franchise consultant Andrew Kostecka has stated a five percent rise annually in the 1990's to almost 430,000 and a sales growth of six percent to $246 billion. Current estimates state that 26% of all retail sales in North America originate from a franchise or a business opportunity.

Market Trends

Overall growth in this industry remains strong, although recent years has finally started to "shake-out" concepts that abused the Franchisor-Franchisee relationship. As a result the biggest trend to affect Franchising is the movement to an "ethical" Franchise Opportunity system. The key elements of this system include:

  • No hidden mark-ups on products
  • Fair franchise agreements
  • Full disclosure of details, regardless of legal requirement to do so
  • True group buying power
  • Large protected territories
  • Measurable targeted marketing strategies

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© Aegis Investment Management (Golf), Inc. 2011. Listed on the TSX-Venture Exchange, symbol AIM.V