A cannabis consumption lounge franchise could be just the ticket for you to enter a $30 billion industry!
For some entrepreneurs, entering the cannabis industry is a difficult proposition: start-up costs range from tens of thousands to millions of dollars, and many banks refuse any business ties to marijuana.
New entrants to the cannabis market may have challenges understanding all of the complex regulations.
For many prospective owners, the entry barrier is just too high.
Consumption lounge franchises that feature a safe and comfortable space for patrons with other forms of entertainment are making a significant impact on the landscape.
What is franchising?
Franchising is a $451 billion business segment where entrepreneurs can obtain a license that provides the opportunity for private owners to use another company’s trademarked knowledge, processes, and other proprietary assets in order to run their own branch.
Some common franchises include Krispy Kreme Doughnuts, Burger King, and Hilton Hotels.
In order to start a franchise, one usually needs to pay an initial franchise fee and subsequent royalty fees. One of the advantages of this route is that franchising often brings with it a high success rate because most aspects related to running the business are already taken care of.
What appears initially as the downside is the business owner loses freedom to decide the name, colors, design, aesthetic, vendors, and often, products. This can actually be an upside as you’re saved the time and expense of going through that process.
For some, the benefits of opening a successful business outweigh the drawbacks. That’s what makes franchising an interesting approach–it opens up opportunities to those might otherwise be prevented from entering the industry.
What makes a cannabis franchise different from other industries?
Starting a cannabis lounge franchise is not very different from the traditional type. But there are notable differences related to compliance.
As cannabis is federally illegal, you can’t ship products across state lines. The great part about operating a lounge is there’s none of that to worry about.
Unlike dispensaries, they don’t have a need for in-state grow operations to supply them, because patrons bring their own.
Should you franchise a marijuana business?
Building a cannabis business is challenging because there are so many regulations in the marijuana industry. One example of this is that there is some conflicting information when it comes to licensing. Working with a franchisor can help you navigate some of these twists and turns.
Opening your lounge requires more than simply applying for a license or construction. If you open your doors, you’ll need to stay focused on compliance issues like state reporting and taxes. As an owner of the business, you will also be expected to handle daily tasks including staffing, payroll, merchandise and marketing management among other things.
If you’re entering the cannabis industry as a new business owner, franchising can be an excellent avenue for increased competitiveness because if offers a turnkey solution to enter quickly. One of the most common demographics for franchises is first-time consumption lounge owners looking for this very type of quick and easy entry into the market.
Having a team of experts to guide your business through the complexities of the industry is worth every dollar for some owners.
If you are a dispensary owner and your business is struggling, or if you are looking for help finding success, independent store owners may want to consider working with franchise opportunities. The strength of a franchise system in today’s market can give an edge by providing management support and infrastructure so that start-up costs stay low.
Benefits of franchising a cannabis consumption lounge
The cannabis market has continued to grow exponentially. Established markets such as Colorado and Oregon have seen huge expansion of companies. While new markets like Oklahoma, Michigan, and Massachusetts are quickly opening dispensaries because their legalization allowed it. The best part is the lounge space is still wide open. In states where legalization is pending, having the rights to open a lounge is a huge advantage for an entrepreneur.
Many states are witnessing an economic opportunity. But not everyone can respond as quickly as the market grows. Franchising is a good way to reach maximum potential for business, and create profit in an emerging economy.
The main benefits of opening a marijuana consumption lounge franchise are:
- Quick time to market – Someone to advise you on regulations and site selection means getting your doors open faster.
- Less risk – Opening a franchise system location may reduce the risk of opening and owning a small business.
- Brand recognition – A franchise could mean a built-in customer base from day one. Especially one making a splash as a market leader.
- Training and support – A team of professionals with a proven track record are on hand to provide guidance, marketing support and access to other system resources. They can also provide training for lounge staff. – This is important in new markets. Because there is a potential that team members will be new to the cannabis industry.
Bud’s Place is currently offering franchise territories in select markets. To learn out more, find the info here and then contact us!