Improving the Odds of Success

The bright outlook for franchised entrepreneurship isn't accidental. The International Franchise Association estimates that 90 percent of these businesses succeed. Contrast this with the SBA report showing 63 percent of non-franchised businesses failing in their first six years. No wonder franchising is becoming the business form of preference. And no wonder franchising and entrepreneurs have become fast friends. 

Franchising simplifies. One ongoing challenge of the entrepreneurial mind is finding societal needs to profitably fill. The franchise format turnkeys that for the entrepreneur, allowing the franchised business to start not with the difficult need-defining phase, but with the less intimidating task of offering the consumer a proven solution. 

The franchisee's ability to bypass the need-defining phase is significant, as the high rate of non-franchised business failures identifies closely with this initial level of entrepreneurial activity. Need-defining is to a solution as creativity is to innovation. As Harvard professor Theodore Levitt put it, the difference between creativity and innovation is the difference between thinking about getting things done and getting things done. Having the initial need-defining creativity done, and in a way that confirms its accuracy, is one of the reasons entrepreneurs are flocking to buy franchises.