One of the advantages of franchise is that it already has an established business model, which will greatly help you run the business. You can always ask for technical assistance, in terms of financing, market plans and site selection. Every franchise has management and product training, so they will prepare you before you start. They will also help you a lot with advertising.
There are also some disadvantages: you will not have full control over how the business is run. You will have to pay for things like advertising that may not be essential to you. It will also be required to have things on your inventory that may not suit your location, and if you have a terrific idea, you will not be able to try it, because of the strictly controlled business model.
You can opt for two main forms of franchising: product name franchising and business format franchising. The latter is more restrictive in terms of how you run the business, but the franchisor will also help you more.
Buying a franchise is not cheap. There is an initial franchise fee from a few thousand to tens of thousands of dollars that is sometimes nonrefundable. Buying or renting a proper location and furnishing it may be also more expensive than if you chose to be independent.
The costs associated with your inventory will also be higher than you would have if you were independent, and there may be a “grand opening” fee you must pay, in exchange of the promotion of your business.
And this is not all: you will also have to pay royalties based on your location’s gross income. Sometimes you will have to pay this even if you don’t have very much income, as this fee is for the right to use the franchisor’s name.
You will also have to pay for national advertising fees. Sometimes these are co-op arrangements, which mean your business is advertised in your area or in rotation with other locations. However, you probably will not be happy to find out that the advertising fee goes for advertising the brand or to attract new franchisees, not to advertising your business.
Franchise terms usually run between 15-20 years, and there is the risk you will not be able to renew the franchise agreement. If you fail to pay the required fees, or you can’t meet the standards of operation, the franchisor can cancel the agreement.
Daniel has been writing articles online for nearly 4 years now. Not only does he specialize in business related issues, you can also check out his latest websites on Wooden Filing Cabinet and Unfinished Wood Furniture.
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Mar 04
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Controlling your brand in an electronic age: when planned for and used properly, new technologies can help to protect and strengthen a franchise system … (Legal).: An article from: Franchising World : This digital document is an article from Franchising World, published by International Franchise Association on July 1, 2002. The length of the article is 1118 words. The page length shown above is based on a typical 300-word page. The article is delivered in HTML format and is available in your Amazon.com Digital Locker immediately after purchase. You can view it with any web browser.
Citation Details
Title: Controlling your brand in an electronic age: when planned for and used properly, new technologies can help to protect and strengthen a franchise system and brand integrity. (Legal).
Author: Cheryl L. Mullin
Publication:Franchising World (Magazine/Journal)
Date: July 1, 2002
Publisher: International Franchise Association
Volume: 34 Issue: 5 Page: 30(2)
Distributed by Thomson Gale Controlling your brand in an electronic age: when planned for and used properly, new technologies can help to protect and strengthen a franchise system … (Legal).: An article from: Franchising World
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Tagged with: article • Franchise • Legal • planned • properly • protect • System
Feb 27
How to Create a Franchise Business Plan
Once you have decided to buy a franchise, you need to create a business plan as a blue print for your endeavors. Your business plan should contain everything you plan to do, from marketing strategies to decorating, to ordering supplies to hiring staff, and what your budget is for each. It should also record your aspirations and expectations, as well as any financing arrangement you have. You need to sit down and write absolutely each level and detail of the franchise costs, plans and outcome in order to have a proper plan of action for the business ahead. You also need to ensure that as your business begins and proceeds, you need to record any changes to the plan as they occur, in order to keep the business plan current and accurate. Finally, write a mission statement at the top of your plan; a statement of intent and motivation for you and your employees to follow.
Benefits of a Franchise Business Plan
After you browse a franchise list to see what businesses are available to buy, you need to go for financing to pay for the business, which is a step you should take even if you have the money required without the loan, since that money can be best used elsewhere when you start operating. To secure your financing, a lender wants to know that you have a plan for your business, including expenses, profit projections and other necessities. They need to feel confident that they are investing in a strong business endeavor, so having a business plan gives them that confidence. Aside from that, a business plan is really a smart choice simply because it gives you solid goals to work towards and a plan of action. With something to follow, you will maintain a budget easier, know if your monthly results matched your expectations and analyze how you need to adjust your operations to meet your expectations. Overall it gives you a stronger sense of organization, motivation and direction.
Making your Own Plan Vs Hiring a Professional to Write it
If you feel you are unable to express these things yourself, there are companies you can hire to do it for you, but they will only be able to produce what you tell them and cannot see into your personal thoughts and motivations, making it a better option for you to attempt it yourself. If however you feel that your poor language skills will not convey your plan adequately and in fact will ruin or destroy your chances of getting financing, then consider finding a company whose representative you feel comfortable with and whom you can spend considerable time with to properly relay the ideas you want expressed.
Find out more about establishing your own franchise business plan as well as tips on finding franchise financing opportunities at franchisebusinessinc.com.
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