Franchising is the process of opening or operating a business in which the rights of branded goods or services are given to a particular person in exchange for a royalty fee. Franchises are popular among folks seeking to be business owners but who are concerned about the hazards of beginning a business.
Beginning a fresh business might entail suffering loads of discomfort necessitating following a prolonged bureaucratic procedure and investing considerable time filling paper work. A quicker approach to fame and profit would be to use a franchise. You fundamentally are only continuing the trade of an established brand.
A franchise is some sort of enterprise organization by which a firm which already has a thriving service or product enters into a continuing contractual relationship with other establishments operating under the firm?s trade name and usually with the firm?s assistance, in exchange for a fee.
In reality the franchisee rents the chance to use the franchiser?s trademarks (including logos, colors, marketing materials, and marketing efforts), copyrights (in some instances), the right to market the products and the methods employed to manage the small business and sell the products or services.
The franchisee pays an initial fee in addition to monthly or yearly royalties to the franchiser. These are generally calculated as a portion of the monthly/annual franchisee?s income, and traditionally is between 4%-5% but could very easily increase to 10% for large known brands.
These royalties often include marketing efforts (i.e. advertisements on TV and Radio, and publicity events), equipment upkeep, workforce training, and business development (i.e. research on new products and markets).
Nowadays there are several brands in various sectors which offer franchising opportunities. These are also called turnkey small-business opportunities. Most often the franchisee doesn?t have to have previous experience or expertise in the area on which the franchiser operates.
The franchiser will provide the initial training and also assist the franchisee in hiring personnel with the necessary know-how in the area (i.e. posting job opportunities, collecting and analyzing CVs, conducting interviews, and delivering personnel training).
Franchisers invariably want their franchisees to achieve success. An unsuccessful franchisee signifies inability to pay royalties as well as a bad image for the entire brand (from negative publicity of the failed franchisee). Thus, generally speaking, franchisers execute their own market analysis and can help you select the finest location for your brand-new small business.
Such market analysis assists them to identify the best location for setting up a brand new shop/office using statistical analysis of specific variables.
A franchise system has several positive aspects, which is why it has been the dominating business-enterprise model over the last few years. Though absolute statistics are not available, most research that?s been completed indicates that the survival rate for franchise establishments is substantially higher than for starting a standard business organisation (some say in a franchise small-business the success rate can go up to 95% in comparison with a survival rate of 20% for usual firms).
Franchisers shell out a great portion of their annual earnings on marketing (e.g. Television, Radio, and events) and often have a devoted marketing team to design, change, and put into action the corporate marketing strategy. Such type of devoted marketing team with sufficient resources can readily triumph over crisis situations whether these are brand-related (e.g. a defective product) or general (e.g. economic crisis).
A franchise likewise has a number of negatives which ought to be considered.
- CONTROL. As a franchisee you aren?t 100% the boss of your enterprise. You will need to keep to the operations manual furnished by the franchiser. Typically, you?re not permitted to make business decisions without getting an approval first. Such decisions may include selling the products of a different dealer, selling new merchandise, marketing the products differently, or developing a custom discount policy. Yet such changes may be necessary as a way to become established in the local market.
- COST. Quite often the cost of signing for a franchise network is a lot greater than that of operating your own small enterprise. Whilst you can readily start off your own home enterprise with a truly small amount of cash, becoming a franchisee requires that you have a basic capital at hand. Furthermore, as a franchisee you will need to pay the monthly or yearly royalties no matter whether you make a profit.
- OPERATING EXPENSES. Franchisers may compel you to acquire all products, hardware, and office accessories from their store. You have to acquire these products or services (as a consequence of the contract you?ve signed with them) from the Franchiser, no matter how much money it is charging. More often than not franchisers coerce the staff of their franchisees to take part in regular training in specific expensive training centres. This could substantially increase your operating expenses.
- APPROVAL BEFORE SELLING. Buying and selling enterprises is typical for entrepreneurs. Sorry to say, in franchising a franchisee must request an approval before selling the business organisation. The franchiser has to say yes to the new purchaser before the sale can take place. This drastically cuts down the likelihood of finding a good opportunity to sell the business.
- REPUTATION. As a franchisee your reputation is strongly tied with and connected to any other franchisee on your network (this may be thousands). Bad news produced from any franchisee will affect your business organisation. Even worse, in case the franchiser goes out of business you could possibly wind up closing down your business too.
This section highlights one key set of franchising solutions. There are five pieces to this set:
- UNDERGROUND GUIDE TO FRANCHISING. This franchising guide gives you tips and useful information for franchising. It?s written by individuals who have franchised their current enterprise, and saves all the ?fluff? and legal jargon that lots of individuals may not comprehend in relation to franchising. It breaks down franchising and provides all of the necessary tools you need to franchise your enterprise.
- PRO BUNDLE. It includes easy-to-customize, easy-to-understand templates for essential franchising documents, including a franchise disclosure document, franchise operations manual, franchise tools and development resources, plus the distinctive Underground Guide to Franchising. It has all you need to create a profitable franchise.
- FRANCHISE OPERATIONS MANUAL. This is the holy grail of your franchise. It has information on every single facet of your business organisation. This retail and service oriented guide makes it very easy for you to customize it.
- FRANCHISE DISCLOSURE DOCUMENT. Among the most vital documents for your franchise is the Franchise Disclosure Document. The Franchise Disclosure Document (FDD) is a legal document that franchisers must supply to franchisees, as regulated by the Federal Trade Commission.
- FRANCHISE TOOLS AND RESOURCES. This complete kit of franchise development tools includes vital information and resources that you would need to run a profitable franchise. Must-have information. Every new franchiser shouldn?t be without these crucial tools.
Unfortunately, due to constraints on space, we cannot possibly cover the full details of the system presented here. But should you be interested you could discover more about this system, which is highly recommended to all franchisers and franchisees, by clicking on this King Solomon?s Franchising Gold Business link.
Please, also look into these INFORMATIVE? HOME-BUSINESS OPPORTUNITY? REVIEWS.
You can also find out about starting, restarting, fixing, running, or optimising your work-at-home enterprise by visiting this home, Internet marketing, or online small-business opportunities site.
You?ve got a bright future in front of you. Yes, a bright future is waiting for you!
Regardless how helpless your circumstances are, a bright future awaits you. Regardless how troubled you can be, happiness stands on your way. It doesn?t matter how scared you are, courage awaits you. It doesn?t matter how demoralised you may be, self confidence awaits you.
However much you cry, laughter is on your way. It doesn?t matter how furious you could be, peacefulness is coming to your heart. Yes, you do have a bright future in advance of you!
Dr A A Agbormbai has been setting up his home business since 2006 and has an array of accomplishments and experiences within this area. His articles bring his insights to you to assist you succeed online.
Previously, Dr Agbormbai was a Senior Lecturer of Information Systems and Information Technology at a private university college in London. He?s a PhD in Aerospace Engineering from Imperial College London, specialising in Spacecraft Aerodynamics. He has also worked as a Research Fellow in Fluid Dynamics.
Dr Agbormbai also plays a role in nation building by analysing national problems through his blogs, at political sites online, and providing incisive practical solutions to these problems. He?s the world?s top problem solving guru, having solved problems in such interdisciplinary areas as science, technology, enterprise, people, and national issues. These problems vary from academic to practical.
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