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Potential ?
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Top 10 Reasons To Buy a Franchise
From
About.com
Although there are more than ten good reasons
to invest in a franchise opportunity, your decision to
go into business has a lot to do with lifestyle and
financial benefits. Whether a home-based, service,
retail, or fast-food opportunity, franchising is one of
safest, dynamic, and progressive business concepts you
can invest in.
Buying a franchise allows you to become an entrepreneur
in less time, limiting the multiple barriers first-time
business owners would face. Essentially, you are buying
a “business in a box” – a turnkey operation that has
been designed, tested, and proven by a team of industry
experts. By simply paying the fees and costs involved
and following the designated training program, your
entry to entrepreneurship is instantly satisfied.
The failure rate of franchises is much lower than
starting an independent business. Franchises are a safer
investment because as the “system” grows, so should the
security and strength of the infrastructure. To support
this growth, the franchisor continues to add newer and
more effective methods of improving the concept. A large
franchise system usually means that brand recognition
has reached widespread proportions, thereby increasing
your revenue potential.
Many franchisees have claimed that franchising has
allowed them lifestyle flexibilities that conventional
employment cannot offer. The number one lifestyle perk
continues to be the opportunity to spend more time with
family, followed by an enhanced income. Franchisees have
felt a greater sense of pride, financial accomplishment,
and personal success as members of a successful
franchise concept.
Franchising is a regulated industry overseen by a number
of federal level organizations in the United States and
Canada. The disclosure document, or UFOC, outlines 23
key areas that each franchisor is required to disclose
to franchisee prospects in order to make an informed
decision about the opportunity.
Through such organizations as the SBA, securing
franchise financing has become a streamlined process,
involving less red tape and paperwork. Some larger
franchise systems even provide in-house financing and/or
leasing options. Local or regional small business
organizations across the country have designated
franchise funding programs, providing additional
assistance to women, the disabled, and visible
minorities.
The initial training program offered by franchisors is a
key selling feature which franchisee prospects should
examine thoroughly prior to signing the franchise
agreement. This initial training involve head office
and/or an in-outlet training session, which includes an
operations manual. Ongoing training allows franchisees
to grow within the system and develop strong business
operating skills.
Successful franchisees in any system are rewarded with
advancement within the chain by receiving incentives on
the purchase of additional outlets, leadership roles at
the head office level, and an opportunity to acquire
area developer rights or a master franchise - a role
involving the overseeing and development of the system
in a designated geographical area.
You don't have to be rich to buy a franchise or require
an extensive net worth to qualify. You can find
franchise opportunities for as little as a few thousand
dollars that can be operated from home or on a part-time
basis. The best place to begin your search is at one of
many franchise directories available online that list
thousands of franchises, in all categories and
investment levels.
Becoming a franchisee does not lessen one’s
entrepreneurial role and position. Progressive franchise
systems provide its outlet owners with access to
professional development and leadership seminars,
business coaching, and other industry advancement
initiatives. With a larger support network at arm’s
reach, franchisees are business owners with advanced
knowledge in small business affairs.
Buying into a start-up franchise system can involve some
financial risk and operational challenges, yet the
long-term rewards – especially financial – is a reason
to consider investing in a ground-floor opportunity.
Pioneer franchising relies on the innovations, ideas,
and determination of the “starter group” of franchisees
to assist in the growth and development of the system.
New franchisors typically offer its starter group with
investment incentives such as a reduced franchise fee
and a royalty-free period.
Franchise FAQs
Why specifically do you want to own a franchise?
· Are you money motivated? Do
you feel that you are at a deadend where you are now?
Being money motivated is important. This characteristic
will tend to hold you in good stead when you have to
work long and hard in the first two years of owning a
franchise.
· Do you fit in the corporate environment?
Do you like working for someone? Have you ever been
called a misfit, a maverick, or a malcontent? If you are
very comfortable working for someone else, then owning
your own franchise might not be for you.
· Do you really enjoy working hard, even if there
is no immediate reward?
How self reliant are you? Do you wait for others to take
the initiative? Do you need the approval of others and
considerable support before you make a decision, start a
task, or move in a new direction?
· Are you a risk taker? Are you willing to place
your time, energy, and money into a venture that has the
possibility of failing?
Any way you cut it, you have to take a chance. There are
failures in franchising. Less than 10% but the risk is
still there. Can you handle it?
· How self reliant are you? Do you wait for others
to take the initiative? Do you need the approval of
others and considerable support before you make a
decision, start a task, or move in a new direction?
You do have to be relatively self-reliant because you do
have to manage the business day to day. However, one of
the most significant benefits of owning a franchise is
the support given by the franchisor. The phrase "You are
in the business for yourself but not by yourself" is
very true.
· Do you take real pleasure in being the boss, or
having the authority and responsibility for the success
or failure of a new venture?
If you are the kind of person who enjoys being in
charge, then having the authority and responsibility for
the success of the venture will not be a problem.
· Are you a positive person?
Being a negative person is a luxury you can ill afford
in business. Negative thinking begets failure. You
simply have to be a positive person in order to succeed
in business.
· Do you have good people skills? Can you interact
with people effectively? Do you like people?
In nearly all franchises, good people skills are
critical. If you don't have good people skills, you must
be willing to develop them.
· Can you stick to the franchisor's system, or do
you have to do everything your way?
The primary reason that franchising is so successful is
because the learning curve is transferred from the
franchisor to the franchisee. The franchisor has
developed a successful system. If you are going to be a
franchisee, you must be willing to stick to the system.
You have to do things the franchisor's way. Not your
way.
· Do you like to teach? Do you enjoy training
people in new tasks?
The nature of franchising necessitates almost constant
training for employees. It certainly makes it a great
deal easier if you like to teach.
· Can you handle multitasking? Can you cope with
the multiple demands of operating a business?
Operating a business requires wearing many hats. You
have to be willing to do everything from mopping the
floors to dealing with irate customers.
· Are you willing to accept the help of others?
You simply must be willing to accept the help offered by
the franchisor. It is valuable and it will help you
succeed. Also, help is often forth-coming from
employees. It's prudent to accept all help offered.
· Do you have the determination to get what you
want and go for it 100 % ?
Achieving success does require a certain degree of inner
strength. If you feel strong enough to make your
franchise successful, then go for it.
· What is your educational background? What is your
work experience? What do you really know how to do well?
This seems obvious but it deserves some thought. The
closer your experience is to the type of business you
are considering, the better are your chances of
succeeding.
· What do you absolutely love doing? What are your
hobbies?
A fundamental of human nature is that we always do well
that which we love. If the franchise involves doing what
you love, then you are way ahead. Or, which is more
realistic, if you can fall in love with the franchise
concept, that's the ideal.
· Do you really like people? Do you have good
Most franchises, certainly all retail franchises involve
a great amount of people contact. Even if you really
like people, it can sometimes be overwhelming. If you
are not a "people person," lean towards the franchise
concepts with less people contact.
· Are you introverted or extroverted?
Are you introverted or extroverted? Some franchises
involve you to be outgoing, others not. Don't put
yourself into a situation where you must do things
totally against your nature.
· Are you the hands on or hands off type?
To be successful, most franchises require a hands on
approach. However, there are some which are suitable for
absentee ownership or a hands-off approach.
· Are you willing to work long hours, six to seven
days a week?
Most new franchises demand a great deal of energy and
time in the beginning, especially anything food related.
Look very closely at what is going to be demanded of you
personally and make sure you are willing to give it.
· Are you a risk taker? Are you willing to bet on a
new unproven concept or would you be more comfortable
with a well-established, proven, franchise concept?
· Do you like to sell?
Many franchises demand a lot of selling by the owner.
· Does the idea of really becoming part of a
community appeal to you?
A very effective way to insure success is to become a
giver to the community where your franchise is located.
The more you can give, the better are your chances of
succeeding.
· If a particular type of franchise looks
attractive, can you see yourself spending your days for
the next 5-10 years in that specific type of business?
Imagine yourself in the franchise business, doing
whatever the business demands for years on end. It it a
pretty picture?
How Franchisees Can Benefit From Direct Marketing
What is Direct Marketing?
Direct marketing is any effort made in the marketing process to
directly target and communicate your message to a
potential end user. That means, your marketing “message”
should have no opportunity to be missed because the end
user will see and touch whatever it is you are
communicating.
Door-to-door marketing is an example of direct marketing. At some
point, the person living in the house will open the door
and find some marketing collateral (another word for
promotional piece) resting on the doorknob. Whatever
happens after the end user sees and touches the
collateral is outside the scope of direct marketing –
the ultimate goal was to “personally deliver” specific
marketing message to the target market.
Print advertising, for example, is not a direct marketing method
because you cannot be certain if your ad will be seen by
every person reading that publication – unless of course
you tear out the ad and mail it to a specific group of
recipients.
Direct Mail
Most people will recognize direct mail as the most popular direct
marketing method, yet not always the most effective.
Small businesses should only attempt using direct mail
when they want to target a very specific market niche.
Sending out 50,000 random promotional postcards to a
designated postal area is not usually an effective
direct mail practice – your collateral will likely be
perceived as “junk mail.”
Why Direct Marketing?
Small businesses should look at “cost-friendly” direct marketing
methods that tie in the use of email and the Internet to
reach their target markets, commonly referred to as
e-marketing or web-based marketing.
E-marketing allows you to deliver your message to the end user
without incurring extensive printing, postage, delivery,
or distribution charges. For example, you can buy an
email list of qualified buyers and send them an
“e-promotion” which directs them to your website to make
the purchase.
As long as you abide by the laws of the CAN-SPAM Act, which
establishes the requirements for businesses sending out
commercial email, your e-marketing efforts should
receive a higher rate of response from your end users.
Strategic Direct Marketing
Overall, direct marketing is “target” marketing. Assuming you have
done a
market research study,
you should be able to define your target market (the
people who will likely express an interest in what you
have to offer) and work on creating an effective direct
marketing campaign around these individuals.
Narrowing your target market down to those who are
“qualified” buyers is challenging and may require the
assistance of a marketing consultant or agency. Your
target marketing within a community may total 102,756
people, for instance, yet the individuals who are most
likely to buy from you directly can consist of just
2,375 people. Effective direct marketing will only
address these 2,375 in order to convert these people
into buyers of your product or service.
How to Develop A Strong Franchisor Relationship
From
About.com
Franchisees just starting out in the business will be initially
overwhelmed with the responsibilities of getting the
franchise off the ground. The franchisor will play an
important role in this process, thereby establishing a
basis for the franchisor support that the franchisee
relies on.
Over time, the franchisor will likely back away from your
day-to-day business operations but you should not
interpret this behavior as a sign of negligence. Here
are five suggestions to develop a strong and lasting
relationship with your franchisor to avoid feeling left
out to fend for yourself.
Report Your Activities
Your franchisor may demand that you submit a weekly report to
monitor your progress. If this has not been introduced,
take it upon yourself to report all your activities each
week by email and keep copies of your correspondence.
Establishing this paper trail is critical to your
learning curve and will help the franchisor determine
areas of improvement or assistance.
Be Interactive
If the franchise system maintains a
LISTSERV of
franchisees, get involved by sending comments or
feedback. The franchisor may not reply to all comments
received in the listserv but your involvement can help
others overcome their challenges. In return, you will
benefit from the feedback of other franchisees.
Voice Your Opinions
If you discover a method to improve franchise operations or have an
idea that can help the franchisor enhance the system,
let it be heard. Most franchisees rely on the franchisor
to introduce initiatives or innovations. You can be
pro-active and garner much respect for voicing an
opinion that leads the franchisor to strengthen the
company brand, and in turn, your franchise business.
Act Professionally
Many franchisee-franchisor conflicts arise from the franchisee not
receiving immediate attention from the franchisor. If
you feel that the franchisor is not addressing your
challenge within a reasonable time frame, you should
make every effort to remain calm and act professionally
in order to resolve the matter. A reasonable response
time is about two days, unless the matter is an
emergency which should require franchisor attention no
longer than a few hours.
Start a Franchisee Advisory Group
Creating a franchisee advisory group is a great way to cut down on
repetitive enquiries made to the franchisor involving
operational issues. By designating a key person in a
prescribed geographical area, this person is responsible
for representing multiple franchises on matters that
require franchisor attention. The group can develop a
mass email system to relay all information acquired to
its members.
The
Pros and Cons of Buying a Franchise
From About.com
The pros and cons outlined below should be seen as checklists to
explore which business format option could be best for
you. As you can see, upsides and downside of franchise
ownership are equally weighted. As a next step in your
thought process, you should consider taking the
Franchisee Placement Test.
Pros
1. Established brand, business operating
system, and management/organizational structure
essentially allows you to start your business with
little guess-work.
2. Failure rate is very low: only about 5% of
all franchise systems in the U.S. fail each year,
compared to independent businesses where about 30 to 35%
failure within the first year.
3. You have a network of franchisee associates
readily available to gauge your progress, generate
ideas, and provide additional support.
4. Even with little or no business
experience, you can tap into the franchisor’s expertise,
training, and support instead of relying on your own
judgements.
5. You can benefit from the franchisor’s
national and regional advertising efforts which help
pre-sell your products or services.
6. Potential savings in volume purchases by
franchisor of products, supplies, and services.
7. With franchise success comes the potential
for growth within the organization such as opportunities
to purchase additional outlets with special,
pre-financed conditions.
Cons
1. You will never be fully independent to
make your own decisions.
2. You are bound by a method and system of
operations which you cannot alter.
3. Must pay a
monthly royalty fee
which is based on a percentage of your monthly sales.
4. The costs to buy a franchise can be up to
40% more than starting an independent venture.
5. Limitations placed by the franchisor on
what you can sell or service, as well as adjusting
prices to favor local market conditions.
6. If the franchisor generates negative
publicity or media attention, your franchise can suffer
repercussions from such allegations.
7. Being bound to a contract with many terms
and conditions can place additional pressures in terms
of closing the business, breaching the contract, or
making other independent decisions.
Online Business Alliance
is the unique online franchise for only a low cost of
$5. With
Online Business Alliance,
you have the ability to create a legitimate and steady
system that automatically generate income for you for
years with only your one time effort. OBA with the
amazing stacked
income mechanism guarantee to help you build your online
residual income with a very little money invested and
without risk.
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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