Jan 24

Area Development Franchises and Master Franchises

Filled under: Business Ideas, Business Technology, Start New Business, Successful Entrepreneur | Monday, January 24th, 2011 |
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There are many reasons why franchising is the best type of operation There are many reasons why franchising is the best type of operation for the majority of first-time business owners.
Most revolve around the  increased probability that the business will succeed and provide profits to the  owner in a shorter time frame than an independent business. This allows the owner to address her or his personal goals both financially and personally.
A new franchise opens every 8 minutes of each business day. A total of over 40,000 new  franchises open in most years. In addition, studies prove that franchises survive!
Government studies show that 77% of independent businesses close their doors within 5 years of opening. Only 8% of franchises close in the same time period. That’s only 10% the failure rate of independents!

Franchise Business Models:

  • Master Franchise
  • Single-Unit Franchise, Multi-Unit Franchise, Area Development Franchise

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Jan 23

Franchise Business

Filled under: Business Ideas, Start New Business | Sunday, January 23rd, 2011 |
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There are many different types of franchisesWhen people talk about franchises, they mean a right granted to an individual or group to market a company’s goods or services within a certain territory or location. There are many different types of franchises.

Franchises work by increasing profits for large companies by having someone else pay for the starting of a business, and in turn offering the franchisee proven systems of success and a name brand. It also takes hard work, dedication and commitment to make a success of it – just as it does with any business idea.

What do you need to know before purchasing a franchise:

  • The advantage that you have in franchising is that you are leveraging the brand of a bigger organisation and benefiting from the input that they can give you – in the form of design, advertising, marketing, sales advice and training.
  • Find out who else operates this franchise. Has anyone else made it succeed? Are they successful and are the costs and revenues anticipated by the franchisor realistic? You should be able to see the financial records of the franchisor’s business and see how it works.
  • Compare the opportunity you’re having with those available elsewhere. Does the product you’re going to be selling compare well with the opposition? How difficult will it be to find customers? Are other franchisees operating successfully?
  • Is the business viable? Is it legal and ethical? There are plenty of scam ideas around, with fraudsters offering vast sums of money for ‘work at home’ franchises. These are not proper franchises and, in many cases, are simply a ruse for separating you from your money.
  • Does the business appear capable of supporting the marketing, advertising and training that it has promised you? Don’t panic if you don’t have the requisite product skills. What does matter is that the franchisor provides training to get you up to speed.
  • Budget carefully. Some franchises make clear what your maximum revenues are likely to be. Check the financial projections carefully because your stage payments to the franchisor will be going out anyway. If your business isn’t making sales targets, you’ll find yourself massively out of pocket if you’re not careful. Get your accountant or lawyer to check the numbers in detail.

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