You’re probably familiar with the term “turnkey” especially as it relates to buying a house, but perhaps you’re wondering how it relates to starting a franchise business.
“A turnkey business is a business that is ready to use, existing in a condition that allows for immediate operation. The term “turnkey” is based on the concept of only needing to turn the key to unlock the doors to begin operations” (Investopedia).
The same definition can be applied to a franchise business – it refers to a complete franchise package that has all the pieces in place for you to start running the business right away. A few items the franchisor provides with a turnkey franchise include training, marketing, products, build-outs, materials, and more.
All franchises are turnkey to varying degrees. But even with franchise ownership, there is normally some set-up required. With that said, there are some franchise purchases that can meet the definition of a turnkey business – it all depends on the type of franchise. For example, a home-based franchise or a product franchise is more likely to be 100% turnkey while a retail or service franchise with a physical location might require you to take care of a number of startup tasks.
What Are the Advantages and Disadvantages of a Turnkey Business
The main disadvantage of a turnkey franchise almost goes without saying – higher cost. Because someone else will complete all the work required to start the business, you’ll have to pay more to acquire it. However, if the franchise is successful, then it’ll be worth the premium price.
5 Advantages Franchising – Turnkey or Not
- Ready-to-Go Business – This one is almost too obvious to mention. However, you shouldn’t underestimate the benefits of having a business that allows you to avoid the stress and complications that come with getting a business up and running.
- High Rate of Success – While there isn’t a comprehensive statistic available, it’s fair to say that overall, franchises have a higher success rate than traditional business ventures. It’s in everyone’s best interest for the franchisor to provide franchisees with everything they need to succeed, which makes the turnkey franchise model so attractive.
- Reduced Risk – Franchise ownership comes with a lower degree of risk vs. starting your own business from scratch because it’s based on a proven business model. This makes franchising a desirable option for aspiring business owners.
- Guidance and Support – Another unique benefit to buying a franchise is the training and ongoing support that comes from the franchisor. A franchisor’s role in training and supporting franchisees is critical to everyone’s success in the long-run.
- Multiple Locations & Semi-Absentee Options – Depending on the type of franchise you join, you’ll have the flexibility to choose your level of involvement. You can choose to be heavily involved in the day-to-day operation and even manage multiple locations, or you can run a semi-absentee franchise where you delegate most tasks and maintain more time for other ventures.
Not only does a turnkey franchise benefit the franchisee, but it helps the franchisor achieve a consistent brand in each location, which will help drive the brand’s success. A win-win for everyone involved.
Interested in Franchise Ownership? We Can Help!
While it almost seems like there’s nothing to lose when buying a turnkey franchise business, you should do your due diligence to find one that offers a fair package in regards to price and the support provided. Fortunately, FranNet can help you find the right fit. Our expert franchise consultants will take your goals and abilities and match them with a franchise from our directory of verified brands. We will provide you with the details you need to make an informed decision while guiding you through the process from start to finish. Our services come at no cost to you! Schedule your consultation today!