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Tools
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Forex Trading – FX Nitro, Super Software Tool
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Small Business – Reservations Master and Power Tips for Choosing Reservations Software
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Franchising Treasure House - Features and Benefits
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Franchising is the process of starting or running a business in which the rights of branded goods or services are given to a person in return for a royalty fee. Franchises are popular among people looking to be entrepreneurs but who are apprehensive about the hazards of starting a business.
Initiating a brand new business can involve going through a lot of pain requiring following a lengthy bureaucratic procedure and spending a lot of time filling up paper work. A faster route to fame and profit is to adopt a franchise. You basically are just continuing the trade of an established brand.
A franchise is a form of business organization in which a firm which already has a successful product or service enters into a continuing contractual relationship with other businesses operating under the firm’s trade name and usually with the firm’s guidance, in exchange for a fee.
In reality the franchisee rents the ability to use the franchiser’s trademarks (including logos, colors, marking materials, and marketing efforts), copyrights (in some cases), the right to sell the products and the methods used to operate the business and sell the products or services.
The franchisee pays an initial fee as well as monthly or yearly royalties to the
franchiser. These are usually calculated in the form of a percentage of the monthly/annual
franchisee's income, and typically is between 4%-
These royalties often include marketing efforts (i.e. advertisements on TV and Radio, and publicity events), equipment maintenance, employee training, and business development (i.e. research on new products and markets).
Today there are many brands in different sectors which offer franchising opportunities. These are also called turnkey business opportunities. In most cases the franchisee does not need to have prior experience or expertise in the area on which the franchiser operates.
The franchiser will provide the initial training and also assist the franchisee in hiring employees with the necessary expertise in the area (i.e. posting employment opportunities, collecting and analyzing CVs, performing interviews, and providing employee training).
Franchisers always want their franchisees to succeed. An unsuccessful franchisee means inability to pay royalties and also a bad image for the whole brand (from bad publicity of the failed franchisee). Thus in most cases franchisers perform their own market analysis and can help you select the best location for your new business.
Such market analysis helps them to identify the best location for establishing a new shop/office using statistical analysis of specific variables.
A franchise system has many advantages, which is why it has been the dominating business plan over the last few years. Although absolute statistics are not possible, most research that has been done shows that the survival rate for franchise businesses is much higher than for starting a normal business (some say in a franchise business the success rate can go up to 95% as compared to a survival rate of 20% for normal businesses).
Franchisers spend a big part of their annual income on marketing (e.g. TV, Radio,
and events) and usually have a dedicated marketing team to design, change, and implement
the corporate marketing strategy. Such a dedicated marketing team with enough resources
can easily overcome crisis situations whether these are brand-
A franchise also has a number of disadvantages which must be taken into consideration.
- CONTROL. As a franchisee you are not 100% the boss of your business. You have to follow the operations manual provided by the franchiser. Generally, you are not allowed to make business decisions without getting an approval first. Such decisions may include selling the products of a different vendor, selling new products, marketing the products differently, or developing a custom discount policy. Yet such changes may be necessary in order to establish yourself in the local market.
- COST. In most cases the cost of signing for a franchise network is much higher than that of starting your own small business. While you can easily start your own home business with a really small amount of money, becoming a franchisee requires that you have an initial capital at hand. Also, as a franchisee you will have to pay the monthly or yearly royalties regardless of whether or not you make a profit.
- OPERATING EXPENSES. Franchisers may force you to buy all products, hardware, and office accessories from them. You have to buy these products or services (due to the contract you’ve signed with them) from the Franchiser, regardless of the amount of money it is charging. In many cases franchisers force the employees of their franchisees to participate in regular training in specific expensive training centres. This could greatly increase your operating expenses.
- APPROVAL BEFORE SELLING. Buying and selling businesses is common for entrepreneurs. Unfortunately in franchising a franchisee requires an approval before selling the business. The franchiser needs to approve the new buyer before the sale takes place. This greatly reduces the chances of finding a good opportunity to sell the business.
- REPUTATION. As a franchisee your reputation is closely tied with and connected to any other franchisee on your network (this could be thousands). Bad news produced from any franchisee will have an effect on your business. Even worse, if the franchiser goes out of business you may end up closing down your business too.
This section introduces FranZoom’s franchising solutions. There are five parts to this solution:
- UNDERGROUND GUIDE TO FRANCHISING. This franchising guide provides tips and useful information for franchising. It’s written by individuals who have franchised their existing business, and saves all the “fluff” and legal jargon that many people may not understand when it comes to franchising. It breaks down franchising and gives you all the necessary tools you need to franchise your business.
- FRANZOOM PRO BUNDLE. It includes customizable, easy-
to- understand templates for important franchising documents, including a franchise disclosure document, franchise operations manual, franchise tools and development resources, plus the exclusive Underground Guide to Franchising. It contains everything you need to build a successful franchise. - FRANCHISE OPERATIONS MANUAL. This is the holy grail of your franchise. It contains information on every facet of your business. This retail and service oriented guide makes it very easy for you to customize it.
- FRANCHISE DISCLOSURE DOCUMENT. Among the most important documents for your franchise is your Franchise Disclosure Document. The Franchise Disclosure Document (FDD) is a legal document that franchisers must furnish to franchisees, as regulated by the Federal Trade Commission.
- FRANCHISE TOOLS AND RESOURCES. This comprehensive kit of franchise development tools
includes very important information and resources that you would need to run a successful
franchise. Must-
have information. Every new franchiser shouldn’t be without these important tools.
Close this page and click “From the Author and Customer Service & Support/Provider” to get further information on FranZoom’s solutions.