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How To Chose The Best
Franchise Business With Low Cost and Low Risk with Big
Potential ?
The Best Franchise Business Opportunities
By
Lee Butler
The best franchise business opportunities that exist in the world
today has many factors in them that makes the franchise
become one of the best in the industry. The main factors
in the best franchise opportunities in the world today
are information, home base business, and work from home
companies, small business start up capital, and a
turnkey business system that produces results in a
company profit margin in today’s economy. Information is
a hot commodity in today’s market place in the world.
Franchise opportunities that provide a lot of up to date
information on products and services that people want to
buy are the best in the world.
A franchise business that is revolved around a home base business
is number one in the world. Many people in life today
want to be home with their families, and still earn a
substantial amount of income while working at home. A
franchise business that can give people that freedom is
one the main factors of being the best in the world. The
work from home companies that give individuals more
benefits and potential to earn a big profit in a short
period of time are the best in the world to be apart of
in today’s society. Franchises that offer a small
business start up capital are very more appealing to
individuals to be apart of compared to franchises that
you have to pay anywhere form a multiple six figure
start up to millions of dollars just to be in business.
The people that choose to pay massive amounts of capital to start a
franchise business only find out most of the time that
they own a job that keeps them from enjoying what they
really want to do in their lives today. The last factor
is one of my personal favorites when starting a business
that has a proven turnkey business system that produces
results in a company profit margin in today’s economy. A
franchise opportunity that has a turnkey business system
that produces results in a company profit margin in
today’s economy is one of the key factors in being apart
of a company. Many franchise business opportunities for
sale promise people good benefits and money that they
can make in the business, but if it does not have any or
all the main factors stated in the article above then
they are in for a big surprise when the business goes
live in the economy today. Before you start your own
franchise business look before you leap in order to get
the best results in your business.
These are the main factors that makes a franchise opportunity the
best franchise business opportunities that exist in the
world today. Also, when looking for a great business to
start check out the business module at hand, and get
some feedback form people that are already doing what
you desire to be, do, and have in your business today.
10 Traps for Franchisees
By
Steve
Courtfield
Start your own business, work for yourself, make big
money, guaranteed success. All reasons given to buy a
franchise. But is owning a franchise all its cracked up
to be? Here are the traps to watch out for:
1. You take the Risk, they take your Money
Its got a great sounding brand name, a foolproof
business model and the prediction of fantastic returns.
But if the business is so good, why haven't they raised
the capital and built it themselves? Probably because
the business is still only an idea. By franchising they
make money out of you buying in - it's up to you to make
the model work and make your money back.
2. Who is the Boss?
The reality of buying a franchise is that you are
building a business for the company behind the brand.
The franchiser will expect you to work hard for them,
and your legal obligations will ensure you do; without
question they are the boss. Once in the business many
franchisees find themselves stuck working far longer
hours than they anticipated without holidays, sick days
or benefits.
3. The Rules of Supply
Franchisers charge a start up fee and take an ongoing
royalty based on turnover. But what many franchisees
don't realize until later is that they will also be
locked into supply agreement with the master franchiser
which allows them to dictate your franchise's supplier
of goods and services. Even if you can source the
equivalent product elsewhere cheaper, your contract will
not allow you to do so.
4. Independence or Codependence?
When you buy a franchise, you're not just buying the
right to use the franchiser's name, you're also buying
their business plan as well. Most franchisers impose
strict pricing, branding, and service standards,
limiting the ways you can operate the franchise. While
these standards help promote uniformity of brand, they
can also stifle your creativity and ability niche
market.
5. No Niche Marketing
A franchisee has no control over marketing, promotion or
services provided and niche marketing is usually
forbidden. It's possible your local demographic may be
very different to that of the greater franchise model.
For example customers might be asking for choc-chip
cookies, but if head office will only allow you to sell
vanilla chip, then that's all you sell- even if you know
you could sell more of the other.
6. Has the Model been Tested?
Out of the box some franchise models look fantastic but
if the concept is new, how do you know it will be
successful? Just because they tell you'll make a fortune
doesn't guarantee it- remember they are selling you the
concept in the hope you buy in. While you'll be told
everything is ready to go, have all the systems been
proven to work? One missing link in their franchise
chain could spell disaster for your business.
7. Local Knowledge
The franchise brand might be a hit in the States, but
will it work so well in another country? Just because a
brand name, or product, or service is popular somewhere
else, it might have no relevance in your local region.
Remember you can't adjust the business model to suit
your local market even if it's a matter of survival.
8. Sustainable Territory?
Franchisers sell the franchisee a geographic territory
within they must work. In principle this area should
have enough population or demand for the service,
enabling the business to be viable. If the master
franchise has not guaranteed an exclusive territory to
the franchisee then there is nothing to stop them adding
another franchise to your area and cannibalizing your
customer base.
9. Reliance on the Master Franchiser
Because of the nature of a franchise, and the strict
rules the franchisee must follow, you are completely
dependent on the health of the franchise business model.
If the Franchiser is not financially sound and folds
under debt you are directly exposed to the company's
insolvency. This means you lose all of the marketing and
promotional services that should be provided by the
Franchiser. You will be trading alone, possibly in the
face of bad press.
10. Selling up and Moving on
If you haven't realised already, the master franchiser
controls everything to do with your business. That holds
true even at the end when you decide to sell. It's up to
the franchiser to decide whether or not your buyer is
suitable for the business and you will not be allowed to
sell up until they have found the franchisee they want
to replace you.
Franchise Information You Need
By
James Hunaban
If you are thinking about owning a franchise then there
are some things that you must think about before
starting out on the journey itself. It would actually be
best to consider what's all involved with owning a
franchise of a company before you actually contact the
company you'll be working with because there may be a
lot of hidden rules and regulations involved that it may
not even be worth it in the first place. Nevertheless,
though, if you are set in stone about wanting to
purchase a franchise of a company name then there are
definitely some issues that must be cleared with the
company before you sign into any sort of agreement!
The Fees
The first and foremost issue that you'll probably want
to take care of when entering into any franchise
agreement is what fees you'll be paying. Most companies
require that a franchise owner pay an initial fee to be
able use the company's name and reputation whenever they
want, but there are also some other fees that they must
pay as well. For example, what is usually required is
the franchise owners must pay a percentage of their
profit to the company itself in return for being a
franchise. Even though this percentage may only be 1-2%,
it still could take a big chunk out of the profits. What
you may want to get in writing is exactly how much
you'll pay to the company, whether it will be a
percentage of the gross or net profits, and whether or
not any fees will be required the first year considering
that many businesses do not even turn a profit until the
second or third year!
Renewal Agreements
When signing into a contract with a company for a
franchise one of the things you may be required to agree
upon is exactly how long that contract will be and how
long subsequent contracts will also be. Most companies
require that a franchise owner sign a contract for at
least 10-15 year agreement, but then make subsequent
contracts half of the duration that the first one is
signed for. However, you may also want to know what
exactly will happen if you somehow breach the contract
and bankrupt the franchise before the contract is up.
There may be hefty fines and fees involved, but getting
all of the specifics in writing is the best route any
franchise owner can take!
Location
One important issue with franchises and all company
branches is the location of each one. Many companies
have stipulations that are set so that no company branch
can be in the way, or in a physical location that is
close to another of the same branch. This rule of thumb
probably also goes for franchise businesses, but this is
an issue that you'll want to discuss as well!
There are plenty of other things that you must discuss
with the company headquarters itself before jumping on
any bandwagon or riding on cloud nine! Securing your
franchise is very important and making sure you know all
the rules and regulations goes along with that!
Financing your Franchise
About ninety percent of new franchisees seek
bank or alternative financing to get their businesses
off the ground. There are many funding options to
consider outside of the traditional banks such as credit
unions, government programs, state programs and other
niche programs designed especially for minority groups
Getting
Started on Your Business Plan
The writing of a business plan can be a daunting
process, especially for those who aren’t very confident
about their writing skills. Nevertheless, every new
business venture, including franchises, requires a
business plan to be written at the early stages of the
franchising process.
Creating the
Business Plan
Piecing together the various section of a business plan
will take time, patience, and a lot of thinking and
re-thinking about your franchise venture and its future
success. Whether you are writing your plan from scratch,
following an established format, or using a
computer-generated template, the anatomy your business
plan should contain these seven key sections.
An Overview
of the Small Business Administration (SBA) & Loan
Programs
The SBA was founded in 1953 and is the largest
government-backed funding agency in the United States,
providing an array of financial assistance programs to
small businessess, including specialized programs for
women, minorities and armed forces veterans. There are
three loan options to fund your franchise venture.
SBA Basic
7(a) Loan Program: Guidelines
The 7(a) loan is the most basic and most common type of
SBA loan available to all start-up businesses, including
franchises. Lenders who participate in offering this
loan do so as per guidelines of the SBA who in turn
issues a guaranty to the lender for a portion of the
loan.
SBA Microloan
Program: Guidelines
The Microloan Program provides small businesses with
loans of up to $35,000 for start-up or ongoing funding
needs. Under this program, the SBA makes funds available
to local, nonprofit community-based lenders (called
intermediaries) who re-distribute the funds to eligible
borrowers.
SBA
Prequalification Program: Guidelines
The Prequalification Program uses intermediary
organizations to assist borrowers with their loan
application packages and making them suitable for
submission to lenders. This program targets low-income
and disabled individuals, new and emerging businesses,
veterans, exporters, rural, and specialized industries.
Funding Your
Franchise in Canada: The Canadian Small Business
Financing Program
The Canada Small Business Financing Program was
established in 1999 and its goal is to increase the
availability of loans and capital leases to assist and
improve Canadian small businesses. Funded by the
majority of financial institutions and select leasing
companies, the federal government guarantees 85% of the
lender’s losses in the event of borrower default.
Has Your
Franchisor Registered With the Franchise Registry?
The Franchise Registry is a service that benefits both
franchisors and franchisees, provided by FRANData, an
organization that supplies objective information and
analysis on and about the franchise industry. The
Registry lists names of franchise companies whose
franchisees enjoy the benefits of a streamlined review
process for SBA loan applications.
Franchising
for Veterans: The VetFran Program & the VBOC
For veterans retiring from duty, the transition from
military to civilian life can be unsettling and
frustrating. While many veterans in the past may have
considered buying a franchise, the uncertainty,
unfamiliarity, and financial requirements of business
life can quickly strike franchising off the list – until
now.
GE Franchise Finance
GE Franchise Finance is a leading lender for the dynamic
franchise market in the U.S. and Canada, providing
financing for many nationally known concepts in the
restaurant, hospitality, petroleum and automotive
industries.
Butler
Capital
Butler Capital is a national, direct lender offering
competitive fixed-rate loans and leases for amounts that
generally range from $25,000 to $1.5 million – all with
uniquely flexible terms. Unlike conventional lenders,
brokers, or government agencies, at Butler Capital
you’ll receive credit decisions typically in 72 hours or
less.
Edlo Leasing
Established in 1993, Edlo has been providing leasing and
financing options for franchise concepts and general
business equipment leasing since 1994.
Popular Leasing
Popular Leasing offers small business financing,
franchise and municipal real estate loans with the
quality, service, and simplicity of a leasing company.
With their bank partnership, they can assist you with a
wide spectrum of products so all your needs can be
fulfilled from one source.
Online Business Alliance
is the unique online franchise for only a low cost of
$5. With
Online Business Alliance,
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system that automatically generate income for you for
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Online Business Alliance
provide its members all the necessary tools for
successfully managing and marketing an Internet
business: hosting, websites, back office, marketing
tools, advertising tracking tools, banners, texts,
audio, video creating software, 24/7 support and
training for newbies. The most valuable thing is
that all these tools are totally FREE after you have
become OBA
member.
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