Alternatives to Owning a Franchise
The Franchise Partnership
As mentioned, owning a franchise takes a great deal of financial equity and responsibility. This is something that many people are ill-equipped to handle even though they may want to own the franchise all they want! On the other hand, a franchise partnership may be just the option that they are looking for. As in any partnership, a franchise partnership relies on both people being involved in the business. One party makes half of the financial commitment while the other party makes the other half. Of course there could be various other business agreements as well, such as one party may make the sole financial commitment to purchasing the franchise in exchange for the majority of the profits for a time.
Franchise partnerships can be a great way to getting around owning a whole franchise by yourself and it definitely allows one to have greater freedom and relaxation in the things that are done. For example, instead of having to hire everyone by yourself in order to run the franchise then your partner will be equally as responsible for helping to hire managers, assistant managers, and other employees.
On the flip side, though, as quickly as a franchise partnership is made it can also be destroyed. If you have ever heard the saying that it only takes "one bad apple to spoil the batch" then this is definitely true here. Even though one person of the franchise partnership may be in the business for real and conduct him or her self in an honest way, there are plenty of other individuals who may just be interested in making a quick buck and then pulling out! This can be especially disconcerting if the person who ends up negating the contract was the one to have the least amount of financial obligations toward the franchise business.
All things considered, though, franchise businesses are a perfect opportunity for anyone who doesn't want to own a whole business by himself. These opportunities provide an excellent way for two or more people to be involved so that the responsibilities and obligations, financial or otherwise, don't all rest on one pair of shoulders or in one single back account!
Choosing a Franchise
There are hundreds of options to choose from when it comes time for you to decide to open up a franchise of your own, but there are some important considerations that one must think about prior to doing so. Even though it may seem important to you to jump right into a franchise opportunity with both hands tied behind your back, being so careless about owning a franchise is just one way to enable a failing franchise from the outset! Nevertheless, many people do jump into purchasing a franchise of a company before they really think about what type of a franchise they truly should be running. If you are one that is prone to quick thinking decisions then here are some things about choosing a franchise that you should consider:
Your Interests
Even though you've probably heard over and time again that it is very important to think about your interests when opening a franchise, this could very well be an indicator and predictor of whether or not your chosen franchise will sink or swim! Do you want to own a restaurant franchise? Is opening up a restaurant franchise something that you will be able to keep up for years on end? Even though franchise opportunities, such as upscale restaurants like The Olive Garden, The Golden Corral or another company may seem like a very profitable direction to take, you may not feel like owning the franchise is ten to fifteen years, although many franchise contracts usually require a minimum of twenty years.
Indeed, then, it is truly important to think about what you like doing in your spare time that should lead you to what types of franchise opportunity that you want to open up. For example, if you love watching sports games on television than you may just think about opening up your own sports memorabilia franchise so that you'll be able to watch and be surrounded by the things you love all day long. On the other hand, if you love working with cars then perhaps opening an automobile accessory franchise is the thing for you. In the end, spending time with things that you are passionate about is very important so as not to get too burnt out on the work that you have to do each day in order to make the franchise survive!
Opening your own Store!
Even though owning a franchise can seem like a tempting option to choose, another avenue that many people overlook before heading to the franchise aisle is to open up their own business. There are many advantages to owning your own business rather than having a company franchise, and some of the benefits include being able to dictate what you will do with your own store, as well as how you'll decorate the company store you've created!
All in all, these are some of the most important things to think about when it comes to opening up your own franchise and possibly starting a company of your own. Many people open up franchises everyday with the intent to succeed only to find out later that they are about to close up shop! Finding a franchise opportunity that is good for you will definitely help you in the long run!
Creating a Successful Franchise Opportunity
There are many companies that decide to stay a single-chain store and move up the ladder of financial domination by simply controlling all of the stores and outlets that they open up. On the flip side there are also companies who decide to let their store become someone else's by giving the public an opportunity to open up a franchise. Both of these ideas are important, but creating a franchise opportunity for interested parties is something very important that would be good for the whole company to do. Unless you allow franchises as much freedom as possible in their contracts chances are that you'll want them to stick as close to the company's policies and products as possible so as to not tarnish the company name!
Large companies are the ones who mainly allow others to open up franchise stores, but there are also other smaller companies that definitely should allow it. For example, small towns that have stores, restaurants, and shops that are very popular with the townsfolk there should definitely consider allowing others to open up franchises in other places. If you are a small-town store owner and would like to create a franchise opportunity for interested individuals, here are a few guidelines to remember about making the franchise opportunity a successful one:
It Is Your Company!
Whether or not you will remember this in the end is up to you and how hard you negotiate the contract, but the main lesson to remember here is that a franchise store of your company is still your company, but it is only an extension of the products and services you are offering to people in your neighborhood. When someone approaches you to ask if franchise stores are allowed you may immediately reply "no," but you should definitely reconsider because franchise opportunities are a good thing for both the whole company and the individual who wants to start one.
Another issue that goes along with remembering the whole company and its name is the fact that you, as the company owner, get to be in control of the majority of the contract with the franchise store. If you don't want a certain aspect of your company to change, such as the seating style or the companies that you buy supplies from, all of this needs to be stated in the franchise contract! Everything that has to do with how the franchise presents itself is also very important so that the company name doesn't earn a bad reputation!
Spell Out Everything!
Along with making sure that the franchise owner knows your wishes for the franchise itself, something else that you will definitely want to do is to spell out everything in the contract itself. Making everything clear for the franchise owner is important so no one is confused!
All of these things are important when starting a franchise opportunity of your company for those that are interested in owning them! In turn franchises that are created in the company name essentially mean more profit for you in the long run, which is yet another reason why they're considered a good venture to follow!
Do You Really Want a Franchise?
Throughout the United States and the world there are plenty of opportunities for a good investment. One of these so-called good investments, though, include owning a franchise of a company. Even though it is important for many people to succeed financially in this world, there are many others who despise opening up a franchise just because of everything that it requires. Nevertheless, though, franchises are definitely a popular investment opportunity for a whole lot of people. The chance to have a steady stream of income, ongoing support and training from the company itself, as well as a dedicated fan base all are things that usually tempt a prospective franchise owner to take the financial plunge into owning a franchise. Indeed, franchise opportunities can be very successful ventures for the right person, but here are some of the less-desirable things about owning a franchise that you possibly wanted to know!
The Royalty Fees
Essentially, what royalty fees are, even though they are denoted with such an elegant name as "royalty fees," are pure profits from the franchise owner's pocket that he or she is required to pay back to the company headquarters just to be able to own the franchise. But even though the royalty fee may be only 10% of the profits for a successful business franchise, that amount of money could still be taking a huge chunk away from whatever profits the franchise is making. There are many arguments for the royalty fees themselves and many people contend that they are necessary in order for the company to survive on their own. But considering the fact that many company headquarters even make franchise owners pay annual fees anyway it is often hard to see the point of having both types of financial obligations toward the company!
Lack of Support
Even though the whole franchise package may look appealing and chances are that the company itself will try to market and advertise their own franchise opportunities until they're blew in the face, one of the good things about franchise opportunities that is claimed by companies is the ongoing support for a franchise owner. Indeed, it can be a good thing to have someone standing in your corner helping you with every step of running the franchise on your own, but many people realize that there is truly a lack of support for franchise owners that are having sincere trouble with their franchise store location. No matter how good any company may make it's support team sound chances are that you are receiving the enriched version of how everything will work out after you purchase the franchise itself. After all, the company's whole goal is to make money and what better way to make money than to tempt future franchise owners?
There are plenty of other disenchanting aspects about owning a franchise, but these couple of ideas are meant to help one decide if they really want to own a franchise. Even though the idea might sound good at first, taking a step back and examining the whole situation might be a good idea before going any further!
FAQs about Franchises
There are many questions that go along with getting yourself into a franchise operation. If you are the owner of the franchise then you particularly want to know all the specifics about owning a franchise, so here are some questions and answer that many people will typically ask the company directly in order to know where to begin first.
Franchise Question #1: How Much Capital Do You Need?
Answer: The most obvious concern that one should think about before approaching a company for one of their franchise businesses is how much startup capital they will need. Most of the time this answer will be laying right out in the open, but it's okay too if one decides to approach the company directly and ask how much he or she will need. Many times the company will have a startup capital requirement, but then again some companies are only concerned about getting their fees that are associated with a franchise being able to use the company name, logo, and reputation. On the same note, it would be a good plan to pay the startup or initial fees of the company with cash instead of relying on a business loan for the money. Considering the fact that many franchises will need to get business loans anyway for all types of supplies and other necessary furnishings the best route to take would be to essentially pay for your franchise with cash!
Franchise Question #2: Where Will You Get Supplies?
Answer: Perhaps the next thing that a franchise owner will want to know before he or she actually starts opening the business is where the supplies will come from. When dealing with company headquarters there are many different rules and regulations that are associated with each type of franchise. Some companies will require the franchise owner to purchase the supplies, such as seating, chairs, and cash registers from a specific company that furnishes all of their company's store branches, but there may be other companies that have real loose guidelines about the whole issue. One must make sure, though, that he or she knows all the ins and outs of furnishing the store with supplies before any agreement is ever made!
Franchise Question #3: Am I required to Advertise?
Answer: This is a very important issue in and of itself. Many would-be franchise owners don't realize this, but the advertising that is done for the franchise is actually done by the company itself! Some of the fees that are required to be paid by the franchise include advertising fees, and these advertising costs and fees are supposed to be used by the company in order to generate advertising and marketing for the franchise itself. Such advertising methods may include special discounts that are given on a monthly basis, coupons that are placed in newspapers, and customer appreciation days. Of course, if the franchise is allowed to advertise in whatever way the owner sees fit then no advertising fees may have to be paid, but knowing what exactly is required is of utmost importance before advertising for the franchise itself!
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