Wednesday, October 28th, 2009
Are you thinking about buying a franchise but you’re not sure if the idea is a good one? Here are ten good reasons to go ahead and pursue your dream of owning a successful business.
Proven business: Opening a franchise comes with the advantage of knowing that this business has been successful in other locations. The idea and process of running this business have already been proven. Therefore the learning curve in operating the business can be virtually eliminated.
Lower risk: Risk of failure is lower with a franchise than starting a brand new business. There is a much higher likelihood of success if the same business has done well in other areas.
Established customer base: The brand name that comes with the franchise is already recognizable to consumers, without the franchisee (purchaser) having to spend a lot of money and time in establishing a new brand. The brand awareness provides security and trust to the customer who expects uniform quality to be provided. Therefore a customer base is already established.
Marketing: The franchisee can benefit from any advertising or promotion that the franchisor (owner of the franchise) does at the national or local level, without absorbing the cost. The franchisor can also provide input to the franchisee on a local marketing plan.
Initial and ongoing support: Training and support is usually part of the deal. Since the franchise company has a vested interest in how well you do, ongoing training, system upgrades, product enhancements, and question and answer resources are provided. The franchisor offers experience to franchisee in such areas as accounting procedures, personnel and facility management, and business planning.
Exclusive territory: Rights are exclusive for the territory, with no other franchises sold in the same area as competition.
Ease of funding: Many times obtaining financing for a franchise is easier since the franchise name and reputation are usually recognized by the lenders. Therefore, banks are more likely to fund the franchisee.
Purchasing power: Relationships with suppliers are already established; affording the opportunity to buy in bulk, enabling a great deal of savings for the business.
Pre-purchase information and research: The potential franchisee can make an informed decision because of information that can be obtained prior to purchase. The Federal Trade Commission requires franchisors to provide the franchisee with certain information including the company’s history, information about the officers, litigation history, audited financial statements, the franchise agreement, and a current list of franchises with owners’ names and contact information.
Solid economic niche: Franchises cater to consumers’ specialized needs. Consumers tend to prefer doing business with companies that meet their specific needs and the franchise industry has been fitting the bill.
Whether you purchase a franchise in an existing location or take on a new territory, the investment can prove to be well worth your while. If you are looking for more
franchise information there are many web sites that offer free contact information for many franchises.
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Monday, October 26th, 2009
Investing into a franchise is a huge deal for you. You’re not only sacrificing a great deal of your money and time but also entering into a relationship with a business partner expected to flourish for years and years. For many of us, buying into a franchise is the biggest business deal of our lives. Do you honestly believe that you truly understand everything expected of you legally and financially? Hire a franchise attorney just to be safe.
Basically, lawyers who practice franchise law specialize in the area of law revolving around the rights and licenses granted to to market a company’s goods or services. These services are limited to who can operate them within a particular territory. It also includes the franchise company’s trademark, trade name, or service mark. Here are a few easy to follow steps to hiring your own franchise attorney:
- You’re better off going out and hiring your own attorney for your franchise and not a consultant since they are not the same thing. There are plenty of industry consultants specializing in franchises that can help you get in contact with the right business people and franchisors but you really can’t go wrong with a lawyer who only works with franchises. They work for you and not all parties. They work with your best interests in mind instead of being an impartial facilitator.
- My advice is to also ask someone you know and respect for their recommendation on who to go with. People like bank managers, accountants or trusted business professionals are the most commonly used people for recommendations. People in these types of businesses usually know of a good law firm that employs the services of franchise attorney or at least have dealt with one at some point.
- Ultimately, you want to find an attorney that deals specifically with franchise law only. Sure there are plenty of lawyers who can help you with general knowledge questions but you’re best bet is to find one that understands everything there is to know on the subject of franchises. You will definitely stand a better chance of winning your case with one.
- Don’t be afraid to ask questions. After you set up your meeting with the attorney, ask them any type of questions you want pertaining to the subject matter. They are there to help you and welcome the chance to build a good business relationship. It also helps you establish a relationship with them and get a feel for what type of personality they have which factors in to your decision process. There is a good chance you may be dealing with this attorney on a regular basis so be sure to choose one you want to have a working relationship with.
- Do some extensive research on the history of each attorney are thinking of going with. Look up facts about their track record, success rate and any references of theirs. This little bit of hard work will pay off with finding a lawyer with a good reputation.
- Before you sign or make any agreements on services, go over all fees and charges. How much will their services cost? You’ll find, like any other attorney, a franchise lawyer will ask for a retainer that they can draw funds from. While others charge based on a pay as you go model. It’s important to know what your expectations are for payment.
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Monday, October 12th, 2009
The experts say that owning/operating a franchise will multiply the chances of long term success in business 10 fold. Is this true? It most certainly is. Why? There are many, many reasons that franchises are more successful. The only goal of this article is to provide some knowledge that I gained while researching different franchises myself.
So you have decided that owning a business is something you definitely want to do. I commend you for this. Statistics show that 4 out of 5 millionaires own there own business. The real question is, can you do it? Franchising definitely increases your chances.
How do you know if franchising is right for you? Here are some basic questions to ask yourself. Are you comfortable with failure? Are you a risk taker? Do you have years to wait before you earn money? Do you have huge amounts of start up capital? Are you creative and business minded?
If your answers to any or all of the preceding are NO then franchising could be the direction you want to go in. Once you are set on a Franchise, there are 5 major criteria that you should look at when deciding which Franchise is right for you.
Top 5 criteria when choosing a Franchise
1) What industry is right for me?
Franchises encompass almost any industry you can think of. Food service, Packing/Shipping, Automotive services, Clothing, Cleaning, Apparel, Shoes, Convenience, Cosmetic, Hair care, Collectibles, Books, Education, Health & Wellness, Fitness, Dental, Etc…. On and on the list goes. There are so many franchises to choose from that this MUST be the first question that you answer for yourself. If your not passionate about the industry you choose, your setting yourself up for failure.
2) How much startup capital do I have?
Franchises come in all shapes and sizes. Some have large up front costs and others charge less up front but get a bigger portion of the ongoing sales that your business does. The more you have to start with the more options you have. Some franchises have out of pocket startup capital requirements as low as $1,000 while others will look to see $100,000’s before they will consider you as a candidate. This information is easy to obtain.
3) Am I willing to operate my franchise myself?
The who and how answers when it comes to daily operation of your franchise are very important. This will have a very large impact on the profit margin you can realize with your franchise. If you are willing to put in full time hours in a productive capacity then you will see more profit but you are sacrificing your time to do so. The answer to this question will largely determine the amount of leverage you can apply to your business. That leads us to question four.
4) How much immediate & long term income is required?
This question helps to think down the road to a time when you have proven that you can have success. Is one franchise enough to meet your income requirements? The answer to question 3 comes into play here. It is physically impossible to be in two places at once. If multiple franchises are necessary to meet your income goals then you will need to bring management skills to the table. This is something that many people just can’t bring themselves to do. Putting others in charge of your families financial security can be a deal breaker.
5) Where is the best LOCATION for my franchise?
Location, Location, Location. We have all heard this before. It is never more true than when deciding where to put our franchise. Multiple locations may need to be thought about when choosing the first location due to the possible territorial restrictions your Franchisor may have in place. This is so important. It will be the single most deciding factor whether you succeed or fail. Facility costs vary widely based on class of space, traffic counts and many other factors. The analysis should be thorough. Don’t settle for an inferior location unless you are absolutely sure the savings will outweigh the difference in revenue your franchise will realize.
So that’s it, my top 5 criteria when choosing a franchise. Obviously there are many, many more questions to be asked and answered. In fact there is a list of questions that could be put together for each of the top five listed here. As someone who has been through the process, my advise is simple. Be very thorough in your research, ask lots of questions, don’t get pushed around by anyone and interview no less than three current franchise owners to get there perspectives before you make your decision.
It is proven that the franchise concept is one that has stood the test of time. If you are certain you want to be in business for yourself and can put up with not making all the strategic decisions yourself, a franchise just might be the perfect business model for your success. Again, without a passion for what you are doing, success is not probable with or without a franchise.
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