Franchising – The risk free solution to starting you own business?

Starting a business is tedious, expensive, and risky. It involves a lot of paperwork, market studies, coordinating with concerned agencies, scouting for the right place, and providing a significant amount of money for lease, initial inventory, furniture, and equipment.

However, nowadays, those thinking of starting a business have the option to start from scratch or simply get a franchise from reputable establishments. It is a fact that many success stories in business started from scratch and the vision of their founders. Starting from scratch is good if the business has something innovative to offer and can sell its products at a competitive and affordable price. It also must find the right business site, near its target market, and be able to advertise well in order to make consumers be aware of its products or services. This can take a long time, a lot of money, and uncertain market response.

On the other hand, considering the present aggressive competition in business, a franchise offers an enticing alternative. Franchising is a relatively new concept in business that caught the imagination of many business-minded people. In non-technical language, it simply means putting up a branch of a well-known company wherein the franchisee pays an agreed amount to the franchisor for the use of its brand name and identity. The franchise fee may vary according to the size of the franchisor’s customer base, popularity, and prospective profits. In addition, the franchisor offers its track record and effective business strategy. In the last few years, franchising became so popular that almost all successful companies have at least a few franchises. Many have even ventured into franchising overseas.

Despite the fact that big businesses demand a hefty sum of money as franchise fee, the benefits of franchising far outweigh its price. A good franchise offers a total package that includes site selection, lease negotiation, management and personnel training, and store design in addition to allowing the use of its trademark. It also provides continuing support on marketing, quality assurance, and troubleshooting to ensure that all franchises follow the same standards of quality. Hence, in retail outlets, processes are standardized, quality is assured, and customers are confident that they are getting their money’s worth.

Take the case of one of the most popular and successful franchises: McDonald’s. Today, McDonald’s franchise stores are everywhere, not only in the US but also in many countries abroad. When a customer walks into a McDonald’s outlet anywhere in the world, he can expect the same high quality of food and service.

This is because one of the most significant advantages of franchising is that the retail will have access to the knowledge and expertise that enabled the franchisor to develop and expand its business. Since each franchise will adopt the same strategy that eventually developed from such know-how, all of them share and maintain a solid business platform. Their standard operating procedures (e.g., product pricing, recruitment, and marketing) have already been tried and tested such that many of the early mistakes have already been detected and addressed. Hence, the risk of failing is greatly reduced compared to an entrepreneur who is just starting to establish a business independently.

If marketing and purchasing are centralized, they result in economies of scale, which means lower costs and presumably higher profits. Moreover, all franchise stores benefit from the aggressive and sustained advertising, marketing, and promotional programs handled by the main management. The franchisor's business plan, operations manuals, and market analysis are also readily available, as well as the exact figure needed to fund the new franchise.

Assuming that the franchise is maintained according to the terms of the contract, initial investment can be recouped within a considerably short period. On top of the other benefits of franchising, the prospect of recouping investment early should be an irresistible come-on to any enterprising person.

The arrangement is also beneficial to the franchisor since it is assured of profits even with the franchise fee alone. The management of all franchises is centralized but the responsibility for the hiring of personnel and the day-to-day operations of each outlet rests on the franchisee. This leaves the central management free to focus on marketing thrusts and product research.

The concept of franchising is important because it gives the franchisee a chance to go into business for himself while enjoying the support and customer base of a mother company. In this arrangement, a safety net is provided for the franchisee’s investment since a good franchisor will certainly want to ensure that its good name in the business is upheld and that the new franchise will be viable for the sake of both parties. Moreover, the concept does not require direct experience from the franchisee. Therefore, it opens up a lot of access to various types of business that he might not have otherwise considered.

Indeed, franchising has become an important concept in business because it has proven that starting a business need not be difficult and risky. In fact, with franchising, it can be a piece of cake.

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Franchising – An opportunity for ex-service people

Having worked in the armed forces for years it can be difficult to know what to do regarding work once you have left. It is easy for some who have the necessary skills and contacts to go immediately into employment but for others there is a large gap between leaving and finding the right job.

A lot of people in the ex services are looking towards franchising as a good option, they have the money to invest (retirement gratuity funds or savings), the self motivation and dedication to work which has been instilled in them from years of discipline and hard graft.

The advantages of choosing the franchising option are immediately obvious in that you are buying into an already successful business where the returns are noticeable, you are your own boss but at the same time have an upper management to keep you in the right direction and the return on investment is one which can set you and your family up for life.

It may be that you want to use your existing skills as a base for the type of franchise you are buying into and as there are a multitude of options out there, whether it is retail, automotive or trades & industry, there will always be an option tailored just for you.

Even if you want to branch out into a completely different area than you are used to, there are many franchise opportunities out there that offer extensive training and ongoing support. It is in the franchisors best interest to have you make a success of your new business.

Before diving in head first, it is always best to research the opportunities available to you, there are many franchised businesses out there and not all succeed. If possible always ask the franchisor for a list of franchisees whom you may contact. Try to get some negative feedback from the franchisee, whilst of course the franchisor is very likely to have given you a list of the most successfully run franchises you should still be able to learn a few of the pitfalls which they encountered when they first started.

When talking with the franchisor, remember they are not your employer and this is not an interview, do not be bullied by them because they need you as much as you need them. If you feel at all pressured by them into buying their franchise then maybe it is a sign that you should look elsewhere. For every coffee franchise there are several other similar options available. It is your savings you are investing so take the time to find the best opportunity available for you

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An introduction to me

After having had my head in the clouds for quite some time, having stared at and am still staring at a computer monitor since the invention of the Amstrad 1640, I am now starting to steer clear of all IT related matters that are no longer of interest to me. I have thrown out my coding manuals, deleted all compilers and am well on the way to cleansing my soul.

My new interest is franchising (decided against base jumping) and that's what my blog will be about. Maybe not always, maybe I will gripe a bit, but almost certainly mostly about franchising.

It's a huge leap from what I used to do, but there was a link at some point which made me jump the line. A good friend of mine from Adhive has been in this business a long time and after doing a little work for him the line was securely crossed. I now own, run, manage, promote, look after, dedicate my time too, play with, tweak (you get the message) a franchise advertising website. It's early days yet but with a lot of hard work it should be off the ground and running!

So... Here we are, my franchise blog. I hope you find the articles, news and gripes I submit here of some kind of interest.

Ta!

Enjoy.