Search

Business People Club

Search All Topics !

Franchising Pros And Cons

0 like 0 dislike
153 views
Posted by Emufasa
Last week's question from Anthony R. on how to choose the franchise that would best fulfill his life-long dream of owning his own business sparked a number of emails from other readers wanting to offer their two cents on the subject.

Some folks offered helpful insights and suggestions on how to pick a franchise and a few things to watch out for, while other emails came from current franchise owners asking me to help them sell their operations to Anthony R.

Hmm, sounds like it's time to update the old business card once again. Tim Knox: Franchise Broker At Large… Who knows, maybe I can franchise the concept.

Last week I promised we'd take a closer look at a few of the things you should look for when considering a franchise opportunity. Keep in mind that there are thousands of franchise opportunities that range from the low end opportunities available for a few thousand dollars to the high end franchises that cost hundreds of thousands of dollars.

The difference in price is reflected in many ways: the viability of the opportunity, the level of training and support offered to the franchisee, the track record and financial stability of the franchisor, the success rate of the franchisees, and a dozen other factors.

All a lower end franchisor might offer is a training manual and the right to use their company name. Many also have very little interest in weeding out potential franchisees. The truth is many are in business just to collect franchise fees. They have little interest in whether or not a franchisee actually succeeds. If you have a pulse and a checkbook, you can become their franchisee. And your pulse does not have to be that strong.

The higher end franchisors have very strict franchisee requirements and will not allow just anyone to become a part of their franchise system. They also go to much greater lengths to ensure the success of their franchisees. They offer complete hand holding from start to finish and remain heavily involved in the business even after the doors open. Yes, you do pay dearly for their assistance, but as the old saying goes, you get what you pay for.

Here are a few things to look for in a franchise opportunity:

Turnkey operation
This is the most appealing feature of many franchise systems. Many of the top franchisors will scout the best location for the business, build and equip the facility, hire and train employees, put you through an extensive management training system, then toss you the keys. Furthermore, they will work closely with you for the first few months to help make certain that you know what to do with the keys once they've been tossed to you.

The majority of franchises don't offer such complete turnkey packages, so be prepared to do much of the upfront work yourself. Often it is up to you to find a location, negotiate the lease, build out the space or erect a building, install the equipment, hire and train a staff etc.

Proven track record and management system
As mentioned earlier, many of the lesser-known franchise systems offer you a training manual, maybe a training video, and a few hours of telephone support. Not the best way to learn how to run a business. A good franchisor will provide you with thorough management training, either at their facility or onsite at yours. Since one of the reasons for buying into a franchise system is to tap into their expertise and know-how, thorough training should be a foremost consideration.

Customers waiting for the door to open
I don't have the statistics in my pocket to back this up, of course, but I'd bet the farm that every time a new McDonald's opens its door, it's a mere matter of minutes before the first Happy Meal is sold. Many franchisors spend hundreds of millions of dollars on national ad campaigns to promote brand awareness. This works great for the franchisee who can literally have customers waiting for the doors to open on the first day of business.

Always consider the downsides
There are downsides to franchising. Foremost is the high cost of entry. The top franchise opportunities require considerable investment on the front end, usually more of an investment than if the entrepreneur started a similar venture on his own. You could open an independent hamburger fast food restaurant for a fraction of the McDonald's franchise fee, but you probably won't sell as many hamburgers. What you're buying from McDonald's is not just a fast food restaurant that sells hamburgers. What you're buying is a brand, a reputation, and a proven business system with ready to eat customers. Be prepared to pay a premium for it.

Another downside is that when you buy into a franchise system you often have to pay a percentage of your revenues back to the franchisor. You might also be required to buy supplies from the franchisor, including inventory, paperwork, software, computer systems, and anything else the franchisor decides that they should supply to you.

And there in lies the biggest downside of all. When you buy into a franchise system you don't control your business, the franchisor does. You have very little say-so in running the business. You must follow their processes and procedures without variation. And should you decide to get out of the business you may not even be allowed to sell the franchise to just anyone. The new owner would have to be approved by the franchisor before a deal could be made final.

The bottomline, Anthony, is to do your homework and make sure the franchise you choose fits your personality, your lifestyle, and your pocket book.

Avast

Your comment

Your name to display (optional):
Privacy: Your email address will only be used for sending these notifications.
Anti-spam verification:
To avoid this verification in future, please log in or register.

Related posts

0 like 0 dislike
0 comments 84 views
Franchising - The Licensing Of Trademarks And Methods Of Doing Business

Franchise is a method of doing business by licensing trademarks. A recurring royalty fee being the prime source of income, ... proprietorship business has become the exception rather than the rule.

Posted by Tabooccaneer
0 like 0 dislike
0 comments 84 views
Franchising Information You Can't Live Without

Franchise businesses can be very lucrative. Perhaps you're thinking of starting a franchise business in your area or another type of ... business and also which type of business will work for you.

Posted by Mosquiche
0 like 0 dislike
0 comments 193 views
The Pros and Cons of Online Commerce

As the Internet comes of age more and more people and buying goods online. This has becoming a growing trend that looks like it will ... part of the consumer to be able to pick up potential scams.

Posted by HarmlessRose
0 like 0 dislike
0 comments 24 views
Plant a Seed and Watch Your Business Grow

Do you have all the business you could possibly want or need? If you're like me, you're still growing your business. Marketing ... into action...and watch your business grow by leaps and bounds!

Posted by nicejone
0 like 0 dislike
0 comments 108 views
Ideas For New Products And Inventions

How many new products and inventions can you dream up with in thirty minutes? At least a few if you know the techniques of ... also thousands of other new products and inventions waiting to be made.

Posted by HarshThunder
0 like 0 dislike
0 comments 85 views
Key Employees can and will leave your Business, are you prepared?

Very few businesses can claim to be prepared for the loss of key employees. Quite often it is an unexpected and unplanned for ... of the problems that occur when key employees leave your business.

Posted by nicejone
0 like 0 dislike
0 comments 68 views
Business loan and how to acquire it

Business loan can cater to your each and every aspect of your business. The urgent requirement of funds for your business can be ... a business loan and expand your business, the way you want.

Posted by Cybora
0 like 0 dislike
0 comments 90 views
New company? Boost your credibility and trust!

It is very hard to be "the new guy in the block", since in most of your interactions you will have to try leave good first ... try to look big. Try to serve customers the best way you can!

Posted by Explorer
0 like 0 dislike
0 comments 101 views
Facing Your Daily Stresses And Anxieties In The Business World

Everybody deals with anxieties and stresses in the business world. As a result, here is a list of techniques that a person can use to ... be in the long run at your job and other business endeavors.

image
Posted by Oystrich
0 like 0 dislike
0 comments 92 views
A Franchise - Your own business, but include support and guidance

Many people dream of running their own business and of giving up the day job. Most of these ambitious individuals only have the most ... less, and a McDonald's franchise could cost you a cool $250K.

image
Posted by Octopixy
0 like 0 dislike
0 comments 107 views
Guide to business and data trends

If one factor is to be named on which today's business world stands it is undoubtedly the data management system of ... loss are worth being considered for long term gains of business houses

Posted by Explorer
0 like 0 dislike
0 comments 626 views
Free Counseling And Advice Every Startup And Growing Business Needs To Succeed?

Business counseling fees can be extremely expensive and not knowing where to turn for business advice can be a significant waste of ... all fit into the SBA's Office of Entrepreneurial Development.

Posted by Richard S.
0 like 0 dislike
1 Comment 102 views
How to Combine Work And Leisure While On The Road?

How to Combine Work And Leisure While On The Road?

Posted by Dragonig
0 like 0 dislike
1 Comment 75 views
How to Convert leads into clients and boost your sales?

How to Convert leads into clients and boost your sales?

Posted by LoyalChief
0 like 0 dislike
1 Comment 70 views
How to back up your data and files?

How to back up your data and files?

Posted by BunBunny
0 like 0 dislike
1 Comment 58 views
Are Business Consulting Companies Worth Your Time And Money?

Are Business Consulting Companies Worth Your Time And Money?

Posted by TrustyKitty
0 like 0 dislike
1 Comment 63 views
How to Expand your Business by Leaps and Bounds?

How to Expand your Business by Leaps and Bounds?

Posted by HuggingDuck
0 like 0 dislike
0 comments 25 views
Asset management journal guide

Diligently managed assets of a business organization can make a lot of difference in its profit percentages. Judicious control over all ... on information provided by the asset manger of the company.

Posted by SilkPredator
0 like 0 dislike
0 comments 30 views
Buying A Franchise

Buying a franchise can be a life changing experience. There are many good reasons to pursue your dream of owning a successful ... Consultant and decide if buying a franchise is right for you.

Posted by AmazingKitty
0 like 0 dislike
0 comments 32 views
Build a strong business with strong customer relationships

Most businesses spent time attracting customers to a product or service, trying to win their trust and then ending the whole process with ... with them. If you neglect them, they will go elsewhere.

Posted by Cybora
0 like 0 dislike
0 comments 33 views
8 Ways to Avoid Litigation When You Sell a Business

Based on recent litigation storm clouds, business owners planning exit strategies better batten down their legal hatches. As a ... to minimize your litigation risks and reap the benefits later.

image
Posted by TwinNut
0 like 0 dislike
0 comments 45 views
4 Instant Tips for Running a Successful Internet Business

Running an internet business is not a difficult task; but running a successful internet business can be a bit more difficult. There ... business, but to be successful you will have to be determined.

image
Posted by AfternoonFay
0 like 0 dislike
0 comments 50 views
5 Great Reasons To Hire A Telecommuter

How would you like to hire someone that is more motivated and more qualified to do the work and costs you less than ... , you may even consider converting even more positions to telecommuting.

Posted by PlushSeal
0 like 0 dislike
0 comments 69 views
4 Reasons Why You Need Testimonials to Sell More

The other day I was writing a sales brochure for a West Coast manufacturer. As I got to what I'll call the proof section of ... , the door to repeat sales swings wide open. (c) 2005 Neil Sagebiel

image
Posted by HarmlessRose
0 like 0 dislike
0 comments 92 views
10 Incredible Ways To Sell Your Products Now

1. Make your reader visualize they have already bought your product in your ad. Tell them what results they have gotten and how ... and gain your readers trust to buy your products or services.

image
Posted by Richard S.
0 like 0 dislike
0 comments 81 views
6 Tips for Keeping Your Cool When Customers Get Hot

1. Be assertive - not aggressive or passive. My definition of assertion is simple: "Say what you mean, mean what you say, and ... tips will position you to keep your cool when customers get hot!

image
Posted by Slayerk
0 like 0 dislike
0 comments 52 views
9 Marketing Credos for a Thriving Business

1. Differentiate or Die! You Must Stand Out From the Pack. Don't become another me too option for your prospects to choose ... for you. © 2005 Online Marketing Muscle -- All Rights Reserved.

image
Posted by Octopixy
0 like 0 dislike
0 comments 110 views
7 Ways To Advertise Your Business For Free

. Free directories: directories are perfect for customers that are searching for a particular topic. What's great about them is ... for a recipe swapping group when you are advertising shaving cream.

image
Posted by ShowDolphin
0 like 0 dislike
0 comments 113 views
10 Ways To Ensure Your Flyer Avoids The Bin

Flyers are an excellent marketing tool to promote a club night or event. They are commonly used for student promotions throughout the country. You ... wonders. 10. Er, try not to stand near a bin.

image
Posted by BeautifulWolf
0 like 0 dislike
0 comments 163 views
66 Ways To Promote Your product or Services

Some guru sells his program because he has 60 ways of marketing. One Dentist was asked about his marketing he said he had 100 ways and ... . It will be at least 2 pages with a lot of information.

image
Posted by PositiveVoid
0 like 0 dislike
0 comments 73 views
7 Points In Finding A Home Business

There is so much information online it's amazing. You find something that interests you and you request information and then you ... use this information to find what you are looking for, freedom.

image
Posted by OpinionOwl
0 like 0 dislike
0 comments 69 views
6 Steps to Effective Communication

Effective leaders are known for being excellent communicators. Here's what to do. 1) Avoid "Not." Negative talk encourages ... smile (or at least a pleasant expression) encourages open communication.

image
Posted by TrustyKitty
0 like 0 dislike
0 comments 95 views
3 Ways To Protect Your Customers

Customer security is one of the prime considerations of any retail outlet today. Whilst implementing key marketing strategies in order to ... the more likely they are to spend money in your store.

image
Posted by SwiftHeroine
0 like 0 dislike
0 comments 112 views
7 Tips to Starting a Successful Small Business

Getting a small business off the ground is challenging to say the least. Here are some tips which will prepare the ground for ... this? Understand that in every problem there is potential for good.

image
Posted by Mosquiche
0 like 0 dislike
0 comments 74 views
10 Effective Ways To Reduce Your Business Costs

1. Barter If you have a business you should be bartering goods and services with other businesses. You should try to trade for something before ... quality. Don't just be satisfied with a few. ----

image
Posted by Sassassin
0 like 0 dislike
0 comments 72 views
7 Simple Steps to Get More Out of Your Day

Let's face it - time is probably our greatest resource. We never seem to have enough of it and it seems to pass so quickly. Well we ... easiest way to more out of your day and more out of your life.

image
Posted by MysteryWasp
0 like 0 dislike
0 comments 97 views
8 Great Interview questions to help you find the right Candidate

1) Do you have written goals you want to accomplish and if so, tell me about them? You are looking for indications of maturity, ... you're ready to take the next step with this person. Good luck

Posted by BumblingBee
0 like 0 dislike
0 comments 67 views
Creating Cash Flow with Old Inventory

Being a retail consultant, there is a comment many business owners used. It is I'm not giving away my inventory". It is ... discontinued. This will make your bottom line better in the long run.

Posted by ForceSoldier
0 like 0 dislike
0 comments 65 views
Five Steps to Create a Budget for your Small Business

How I hate budgets! Every time an accountant told me to put together a budget for my company, my response was - When ... Have systems in place to increase revenue and decrease expenses as necessary.

Posted by UncleRhino
0 like 0 dislike
0 comments 67 views
What to Look For in a New Franchise

Want to buy a franchise opportunity? Great idea! Here is a high-level overview on what to look for: Operating History - A ... of re-sales relative to the total number of franchises in existence.

Posted by HairySeahorse
0 like 0 dislike
0 comments 64 views
Project Management - Dealing With Information Overload

You probably are aware by now how critical project management is for your bottom line. Organizations all over are tuning in to the ... of hours of time through learning by way of trial and error.

Posted by Knighthawk
0 like 0 dislike
0 comments 57 views
Business Tools to Help You Run a Successful Business

When setting up a business, even the best prepared among us will struggle to do everything and remember everything. It is very unlikely ... to get the right tools will pay off time and time again.

Posted by VirtualAssassin
0 like 0 dislike
0 comments 113 views
The Importance Of Business Plan

Do you need more money to expand your business? If yes, you need a business plan. If you are starting a business, despite the ... Make it a priority to have this crucial road map for your business.

Posted by MammothMoth
0 like 0 dislike
0 comments 77 views
The Benefits of Business Improvement Programs

By attending to an effective, well-structured Business Improvement Program (BIP), business owners are able to learn elaborate, ... rapidly enhance the efficiency and the prosperity of your business.

Posted by OpinionOwl
0 like 0 dislike
0 comments 77 views
Business systems – what are they?

You may have heard about them before, but never quite thought about how they can help you personally. They seem to be an ambiguous element ... , in exactly the same way, for many more years to come.

Posted by Sassassin

online business.png

Connect with us:
...