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Why
buy a franchise?
Franchises are one of the hottest business deals around. And for
a good reason. Franchises are probably the safest type of business
to get into because of the strict government regulations. Franchise
businesses are in their simplest form, any business that has a proven
system, proven itself profitable and can be operated by anyone using
a proven systematic training method and be able to follow directions.
If you are new to business, a franchise is probably your best bet.
The reason is, they provide you with step by step directions on
how to get started how to market the business, help you with advertising
and there to support you in every step of the way with training
and continued 24/7 support. These things can be very helpful to
have access to when running your own business, you are never alone
when you own a franchise, because remember running a business is
not as easy as it looks.
The Pros and Cons of Franchising
The greatest strength of franchising is its ability to bring independent
retailers together using a single trademark and business concept.
The benefits from this affiliation are many: brand awareness, uniformity
in meeting customer expectations, the power of pooled advertising
and the efficiencies of group purchasing. For the individual owner,
there are several advantages to franchising. The ever present risk
of business failure is reduced when the business program has already
proven to be successful in the market place; the use of an established
trademark saves the business owner the cost of creating and advertising
a name that customers will recognize; and the advantages of group
advertising and purchasing make operations more profitable. In addition,
ongoing training creates an instant operational expertise that would
otherwise need to be acquired through trial and error. Also, with
franchising, expansion seems to come more naturally. Operating a
successful franchise may quickly lead to building a second and then
a third business, and also on. Fortunes have been built this way.
The Benefits
Reduction of risk
* Turnkey operation
* Standardized products and systems
* Standardized financial and accounting systems
* Collective buying power
* Supervision and consulting readily available
* National and local advertising programs
* Point of sale advertising
* Uniform packaging
* Financial assistance
* Site selection guidance
* Operations manual provided
* Sales and marketing assistance
The Cons
Franchising, however is not for everyone. Fiercely independent entrepreneurial
types (you know who you are) may chafe under the strict operational
requirements and specifications of a franchised business. If things
have to be done your way you may want to head in another direction.
Also, know that some franchised systems are better than others.
A weak franchise program will not train you well to handle the challenges
of the business, will not do a good job of assisting you when problems
arise, and will not make best use of your advertising dollars.
The Downside
* Loss of control
* A binding contract
* The franchisors problems are your problems
If you're considering buying a franchise, don't let wild expectations
influence your decision. While franchising is designed to put people
into business who have never owned a business before, the excitement
of ownership can create an impulse to move forward without proper
planning. If you rush headlong into buying a franchise expecting
to boost your current work salary, but the earnings don't allow
you to pull out more that half your former salary, you will be one
unhappy camper. Work with a good CPA to prepare a cash flow projection
for the business before you take the plunge. Know how long it will
take to break even and turn a profit, as well as the amount of salary
you'll realistically be able to pay yourself.
Good Luck. Enjoy searching on FRANCHISEFETCH.COM
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