Five Benefits of Franchising to Achieve Long-Term Financial Success

If you’re considering leaving your corporate job or getting off the retirement couch to start your own business, NTY Franchise Company is something you might want to seriously investigate.

“Why?” you may ask. Basically, the overall risk profile of such a career move/investment — and likelihood of achieving long-term financial success — is much more attractive than attempting to start some one-off business on your own.

Here are a few things to consider:

GREATER FREEDOM AND AUTONOMY

Most people realize that you must work hard these days to survive or get ahead regardless of what type of employment you are in. When you own your own business it’s no different. What is different though, is that when you own your own business — such as through a franchise with a structured business model — you substantially control your own destiny.

As a franchise owner, once your business is up and running — generating free cash flow and staffed appropriately — the model typically provides significant freedom and autonomy to be in control of your own destiny and schedule. And when you control your own destiny and schedule you have much greater discretionary time to spend with family, friends, on exercise, hobbies, etc.

Ultimately, when you have more time to spend with people you enjoy — or doing things you like to do — you are happier and willing to stay dedicated to your new routine (or career/business!) for the long term.

SHORTENED TIMELINE TO PROFITABILITY

You could theoretically achieve freedom, autonomy (and financial independence) by just starting your own successful business from the ground up. But history has shown that without a predetermined structure in place to quickly get off the ground and reach economic stride, attaining independent small-business success is much easier said than done. In fact, new, one-off start-up businesses tend to have a very high failure rate versus franchising.

“When you sign on with an established national franchise company you go into business for yourself; but not by yourself,” says James Wollman, Vice President of Franchising for NTY Franchise Company. “There is structure; which is particularly important for people coming out of corporate America who are accustomed to having structure most of their career. Basically, we utilize structure to shorten the learning curve — to get you bigger, better, faster and stronger than you otherwise would on your own.”

Many grassroots small businesses take years to achieve profitability as they find their way in the unchartered, hyper-competitive world we live in today. And actually, many never achieve profitability or sustain profitability over the long term.

SUPERIOR, PROVEN BUSINESS MODEL

The way franchising helps you achieve profitability sooner than you otherwise might with your own business — and sustain it for the long term — is through leveraging multi-faceted proven business models. This includes: detailed prospective target market analysis; deep knowledge in real estate brokerage/leasing contracts; ideal layouts; point-of-sale systems; national marketing; ongoing support and training; etc. The road is well-paved, with good and bad investment decisions and lessons learned — providing the benefit of hindsight for your success.

These proven franchise business models typically yield much higher returns than comparable one-off concepts or start-up ideas. “Our Clothes Mentor women’s brand is an upscale resale national franchise consistently generates gross margins of 65 percent,” says Mr. Wollman. “Most retailers would be quite envious of this return level — often a multiple of comparable Mom and Pops’.”

Notably, often securing the best real estate or lease locations (and lowest rates of business financing) are difficult if you choose to go it alone, without a nameplate franchise brand behind you. “We’ve had many people not able to get phone calls returned from real estate brokers on desired locations until they called back and said they were now signed on with us,” explains James.

LOWER CASH INVESTMENT WITH HIGHER CASH-ON-CASH RETURN

To start a truly meaningful business on your own, the level of required cash out the door is often substantial. However, when starting a business based on an established franchise concept, you are more likely to get an SBA loan which will only require 25-30 percent cash out the door — with the balance substantially backed by collateral. This is important because with less cash out the door you can keep more of your existing assets (such as retirement accounts, stock portfolios, etc.) in place, earning a return. Then, the cash flow from your franchise directly services the loan — that you might not have gotten had it not been for the franchise. Looking at it another way, your direct cash-on-cash return is likely to be much higher with a franchise than it otherwise would be by starting a business on your own.

VALUABLE, PASSABLE OR SALABLE ASSET CREATION

Once you have an established, profitable franchise up and running you always have the option to open additional ones, and staff each with its own skilled manager. At that point, you are effectively the CEO, with Presidents at the various operating units.

Whether owning one or several franchise units, over time you will have built yourself a highly valuable cash flow generating investment vehicle that you can pass on to your children or family.

Similarly, as a clearly-delineated franchise model, the business can be sold to an individual or aggregator in a clean and efficiently-priced manner if you ever need the money for other ventures, needs, or simply choose to cash out.

Selling a one-off personal business or group of private businesses is not as easily done — and efficiently priced — as monetizing an established franchise brand. In fact, there are brokers that actually specialize in the resale of franchises, making the sales process relatively easy to facilitate.

DO YOUR HOMEWORK

One thing abundantly clear when considering a career and/or life-changing move into creating your own business for long-term success — You need to do your homework. This goes well beyond internet research. Investigate in other ways such as: visiting comparable businesses; talking with real estate professionals familiar with the market you are looking at; building detailed financial models to be able to realistically project viability — the list goes on and on.

This process is much easier when dealing with an experienced, structured franchise partner to walk you through it. NTY Franchise Company — and their upscale resale concept specialty — is one partner to consider in this journey.

Why? Their senior executives have decades of experience collectively, launching hundreds of businesses which are in fact generating sustainable long-term returns and success for their franchisees. 

MORE ABOUT NTY

Founded in 2006 and Located in Minnetonka, Minnesota, NTY Franchise Company is a pioneering and highly-experienced force in the rapidly growing category of upscale resale retailing. It is the umbrella organization for three proven national resale clothing franchise brands: Clothes Mentor (women’s designer clothing franchise); Children’s Orchard (kids clothing franchise); and NTY Clothing Exchange (teens and young adults clothing franchise).

NTY also has two other successful national franchise concepts: New Uses (household furniture, décor, appliances franchise) and Device Pitstop (electronics repair and resale franchise).

NTY specializes in working with franchisees at every stage of establishing one of its brands including: Research & Discovery; Business Planning & Budgeting; Store Location & Leasing; Financing; Design & Build-out; Point-of-Service Software & Systems; Coaching & Managing; as well as Marketing.

To learn more about NTY Franchise Company’s franchise opportunity visit our website or give us a call (866) 261-2030.