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Choosing A Slow-Growth or Fast-Growth Franchise

Aug 17, 2007
Franchise business models are an attractive business opportunity for many entrepreneurs and people looking for an independent business venture. Franchises can be startups in a fast-growth phase, or an extension of an established business that falls into the slow-growth category. In order to be successful in your franchise venture, it's important to consider the costs and benefits of both business models and see what will be a good fit for you in the long-term. Both slow-growth and fast-growth franchises have many benefits and drawbacks that appeal to some, and do not work for others. There are elements of risk, experience, and potential for growth involved when weighing the pros and cons of a slow-growth or fast-growth franchise business.

Slow-growth franchise businesses are those that require limited investment in training, startup experience, and creating business plans. Slow-growth models generally have a strong and working business plan prepared, and are looking to add locations or grow from something that already works. Slow-growth franchises succeed through their ongoing marketing efforts that have bought results in the past, and the experience of their trainers and management team. Still, the slow-growth models do have their drawbacks. They do not grow quickly, and are often in competition with similar businesses in the area. Slow-growth franchises have limited opportunities for creativity and new ideas, because they are not startups that require many fresh concepts. Because the business model has already been developed, slow-growth franchises generally have higher royalty fees as well.

Fast-growth franchise businesses are fresh startups on the market. The managers, employees, and even owners will work hard to fuel the business and get it up and running. Fast-growth franchises are starting from scratch, so the business model is a work in progress. This creates a window of opportunity for creativity and producing a new idea or concept immediately; this can lead to a higher market potential, low franchise fees, and the options to grow very quickly. Still, there are drawbacks to the fast-growth franchise business. Many of the staff and managers will be inexperienced, and this can lead to increased training and employee development costs. Since the business model isn't a proven one, there can be many setbacks and higher risks involved in investing in the business itself. In addition, the lack of brand recognition will require a strong marketing effort. Market saturation is possible, but could take time depending on the existing competition.

There are many factors to consider when choosing between a slow-growth or fast-growth franchise business, but the potential for success is equal for both. Depending on your management style and business knowledge, either model can be adapted for long-term benefits. Be sure to weight eh pros and cons of each business model, and select the franchise model that best suits your needs.
About the Author
Tristan Andrews writes useful articles about franchises. Discover and explore the world of Franchising. Find out how owning a franchise can expand your financial horizons at http://www.franchise-guide.org/
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