Franchise Business Model: Why It Works
Franchising is expected to grow faster than the U.S. economy in 2025. Output is forecasted to climb to more than $936 billion, up 4.4% from last year. Why is the franchise business model successful? If you want to start a business, we’ve got insights on how you can make franchising work for you.
Franchise Business Model Explained
With franchising, an entrepreneur purchases the rights to operate a business under an established brand. As a franchisee, the business owner gains access to the company’s proven business model, training, and ongoing support. Franchisees are required to follow specific operational guidelines set by the franchisor and they need to pay a franchise fee, and ongoing royalties based on sales.
In addition to built-in brand loyalty, training, and ongoing support, franchising offers many advantages:
- Operational efficiency: Franchises consistently hone their operational procedures to maximize efficiency, leading to better profit margins. They also add technology to enhance operations.
- Peer network: When you team up with a franchise to start a business, you get a network of franchisees. They care about your success. Owners can share best practices and regional insights to enhance their location’s performance.
- Marketing support: A robust marketing strategy helps franchisees ramp up sales and combat rising costs from inflation. Franchisees reap the benefits of a franchisor’s national marketing efforts and local marketing toolkits to generate customer leads.
- Bulk purchasing power: Franchisors negotiate contracts with suppliers to lower supply costs for franchisees.
- Easier financing: Lenders are more likely to provide financing for a brand with a proven track record. Many franchisors also offer in-house financing or partner with lenders to streamline the process.
- Ongoing innovation: Franchisors invest in research, technology, and industry trends to stay ahead of the curve. They have the bandwidth to be nimble and pivot as consumer trends change.
Franchise vs. Independent Business
Starting a business from scratch can be rewarding, but it’s risky. Nearly half of all businesses fail by the five-year mark. If you’re a first-time business owner looking for a structured path to success, the franchise business model is often the smarter choice. Research conducted by Entrepreneur reveals that only 5% of franchises with an initial investment of at least $25,000 fail within the first five years.
A Niche Home Services Opportunity
If franchising sounds like a good path, do your research for a brand in a high-demand industry that meets your financial and lifestyle goals. Concrete Craft is a low-investment opportunity with the potential for high profit margins.
Concrete Craft focuses on concrete resurfacing, staining, stamping, repair and restoration, polishing, and more. Our niche business provides a low-cost flooring option for homeowners and local businesses. We’ve honed our techniques and processes to ensure you provide customers with high-quality work. Our comprehensive training program and technology provide you with the tools you need to serve customers.
“We get a lot of customer leads from the brand’s website,” said David Bradbury, a franchisee in Columbia, South Carolina. “It has been a vital tool and a big benefit to our business.”
Home Franchise Concepts, a leader in the home services industry, backs Concrete Craft. In 2024, Home Franchise Concepts added more than 250 territories across its entire portfolio and is focusing on continuing to help new entrepreneurs build successful businesses this year. With more than 30 years of experience in the home services industry, Home Franchise Concepts is committed to helping entrepreneurs make an impact in their local community.
Take the next step!
Control your destiny and learn how to become a franchise owner with Concrete Craft. Submit a franchise inquiry form to start crafting a better future with Concrete Craft today!