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Franchises these days are into all kinds of businesses – food, retail, clothing, repairs, salons, spas, services, are more.   The United Franchise Group has over a thousand franchises with a high percentage of success. The Palm Beach Post cites an IFA (International Franchise Association) Educational Foundation report that more than 90% of franchisee contracts are renewed.  This is a much higher success rate compared to start-up businesses that rarely last 5 years.

The advantage of a franchise is not in the variety of options, but the benefit of buying into a company that has an established reputation and customer base.

“Because it’s all been researched and developed,” United Franchise Group CEO Ray Titus said. “It’s being used successfully by people in the business.”

The West Palm Beach-based corporation has 1,400 franchises across five types of businesses and was recently recognized by the governor’s office and Enterprise Florida for business diversification.

More than 90 percent of franchises renew their agreements, the IFA Educational Foundation found. With contracts averaging five to seven years, that means the rate of success is much higher than small businesses as a whole, said Matt Haller, spokesman for the International Franchise Association.

U.S. Small Business Administration statistics show that seven out of 10 new businesses – ones that hire at least one person in addition to the owner – survive two years, but only half survive five years, Haller said.

Buying into a franchise is an excellent opportunity, said Dick Shon, who retired to Boca Raton after running Midas Muffler shops in the Milwaukee area for more than 30 years. Ultimately, he owned six stores.

“I bought into it knowing entirely from Day 1, I had potential customers,” Shon said. If he had opened Dick’s Muffler Shop, he would have been an unknown foundering among a crowd of auto repair shops, he said.

The pros? You have someone to go to for advertising, promotions and business operational support, Shon said. The cons? It costs more money than an unaffiliated business and you lose some independence.

As far as costs go, franchises have upfront fees, monthly royalty fees and sometimes other required costs, such as mandatory training or buy-in to promotional programs. And companies often set a minimum net worth and require an amount of cash available for operating costs

Franchises can be expensive to start, which is probably the biggest disadvantage, said Georgia Abbott, director of the Alden B. Dow Center for Creativity & Enterprise at Northwood University. Think $70,000 to $500,000 just to buy in, she said.

United Franchise Group’s opportunities also provide entry points for people who would otherwise open a mom-and-pop-sized business. Titus said initial investments range from $25,000 to about $50,000. The company requires owners to have working capital of $30,000 to $50,000 for retail businesses and about $20,000 for home-based businesses.

Many franchises are available to middle-income people who are looking to open their first business.

Abbott said it’s important to determine the franchisor is granting you a sustainable market and that the brand will bring in enough volume to pay for the investment.

Starting as a franchise can be dramatically different from starting an independent business.

Jack Siney started several businesses “from scratch” long before he and wife Stephanie bought the Plato’s Closet franchises in Royal Palm Beach and Boca Raton.

The franchise system takes care of the processes, the infrastructure such as a computer system and marketing, and often gives you a network of fellow franchisees to work with for discount ad rates, he said. That leaves the business owner able to focus on success.

In many franchise systems, new owners attend training with other new franchisees and form networks for support and shared advertising.

Photo by United Franchise Group