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Discussion in 'Growing and Managing a Business' started by RestOwner, Jan 14, 2011.
What do I need to know about Franchising?
That's a pretty broad question RestOwner and books have been written on the subject of franchising. If you are considering getting into a franchise business you probably need to know the following;
Franchise businesses have a higher success rate than normal businesses
There are poor franchise systems, so when choosing a franchise you need to be careful that you are picking a good one
When considering a particular franchise speak to existing franchises and not just the ones that the franchisor recommends you speak to. Ask them about their experience and if they would recommend the franchise.
Do you have any specific questions on franchise businesses?
You need to ask yourself a few questions before going into a franchise business. Does the prospective franchiser have a good background and reputation? Has the franchise operated successfully within several different locations for at least 3-5 years? Are there any complaints or litigation's against it? Is there a solid business model that is both doable and potentially profitable? Both the Federal Trade Commission and the Better Business Bureau have information on various franchises for prospective franchisees needing to conduct background research, so make sure you do your homework first.
Really, a pretty broad question but follow these points before franchising your business as you will have to analyze your business first that whether it ready for franchising or not which is the first step of franchising. Ask these questions from yourself and find how many can be answered yes from you.
1. Can your success be duplicated?
2. What are your sole promotion schemes?
3. Can your system be duplicated?
4. Do you business has more than one location now?
5. Finance which matters a lot.
There's a little Q & A on starting and owning a franchise, what amount of capital is needed from the onset, types of training offered and what qualities are needed from a professional level. It's based on moving franchise opportunities, but you should be able to take away some pointers for other specific business types.
I have a friend who is also looking into franchises. What they had to tell me about costs was interesting. Touching briefly on it here.
The franchisor up-front fee
There are also ongoing costs that need to be considered.
Management service Fee.
Ongoing tock purchasing
Possible contribution to national advertsing campaigns.
I hope this helps.