The Key to Starting a Franchise
If you are thinking about starting a franchise, you are on the right path to becoming a business owner. However, before you get too excited and start looking for a franchise, you need to have an idea of what you will be getting into and what you can expect. There are advantages and disadvantages to investing in this type of business that you need to be aware of.
A franchise is different than a privately owned business in many respects. To start with you need to understand exactly what a franchise is. This type of business is in fact a legally binding agreement between the franchisor (i.e. Taco Bell) and the franchisee (that is you) in which the franchisor gives you the right to sell their products and use the trademarks and names. You will be expected to do according to their established business plans and methods.
In exchange for this you will be required to pay the franchisor a percentage of your sales to the franchisor as royalties and fees. In essence the franchisor is not an actual business, it is a method used by many industries to bring their products or services to the public through a series of privately held franchises.
Among the biggest advantages of starting a franchise instead of striking out on your own is the fact that you will be starting a business that in most cases already has an established and recognized name. Once you have made your investment and are ready to start your franchise, the franchisor is going to provide you with all of the training you need with regard to the products and/or services you will be selling along with business training in most cases. They want you to succeed as much as you want to be successful, so they are going to provide with every opportunity to do so.
They will teach you how to run your business according to a business plan that has been developed over years of trial and error. Think of it this way, if their business plan did not work, then they would not be selling franchises. Some people have an issue with being told how to run their business, but if you want to see a successful franchise run under an ideal business plan take a look at McD’s or KFC, all of these restaurants are run under an identical business plan.
You will also have access to their entire range of products, which in most cases you will find are well known and a complete advertising program that is likely to be far better than anything you might be able to afford on your own. In many cases you are also likely to find that the initial investment amounts required to start a franchise is significantly less than the amount you would need to start out on your own.
As with starting any type of business, there are disadvantages to starting a franchise. No business comes without its good and bad points, but in most case you will find that with a franchise the good outweigh the bad. Considered to be one of the biggest disadvantages with a franchise is that you are going to give up a certain and often relatively large amount of control over the way you run your business as you have to stick to the established business plan.
The other major disadvantage is that you are going to be required to pay the franchisor a set percentage of the money you take in as royalties and fees. This money must be paid whether you are making a profit or not. In general, provided you are willing to put in the hard work and have the initial investment cash, you will find that the advantages to starting a franchise far outweigh any disadvantage. After all if they did not, the concept would not be as successful as it is and there are literally millions of franchised businesses located all around the globe.
If you are interested in starting a franchise, Next Big Franchise has information on dozens of the most promising franchise opportunities for you to look at. You will find information including costs and contact information to help you get started on your way to owning your own business.
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