Before You Open a Franchise Business
It’s a big step in your professional career when you determine that you’d like to go into business for yourself. What remains is deciding what type of business you’d like to be involved in. Franchising is one of the most popular options for people in your position.
Basically, you’ll be running a clone of an original preexisting business. It’s sort of like renting a business concept and plan from someone and then running it using your knowledge and skills. Obvious examples of such businesses are international fast food chains popping up on every corner in existence like McDonald’s and Pizza Hut. Like all businesses of course, franchising has its advantages and disadvantages and you should understand both before making your next move.
There are many advantages to becoming a franchisee. Compared to starting a business on your own from scratch, it has a much lower failure rate. This is because you’re working with a tried and true business model and you’re operating under the cover of a recognized and established brand name with all the reputation and clientele it already has. Buying into a franchise will also give you much more power and business clout in the market which will eventually be reflected in bigger profits for you and the franchise owner.
Not everything about franchising is peachy, though. To begin with, you probably need more finances on hand to start a franchise business than a small business belonging entirely to you. You also have to remain within strict guidelines while running your business. These are usually supplied by the franchise company in your contract with little room for deviation or else you may risk termination of your business agreement.
From a legal perspective, you have to be certain that you’re getting involved in a legitimate franchise, especially is if it’s still a small one a lot of people haven’t heard of, yet. Since there are differences between the franchise laws in each state, the best thing you can do to avoid any legal pitfalls is hiring a lawyer to guide you through the process and informing you of what you need to know.
Filed under: Franchise Advice, Franchise Articles
While searching for a suitable business franchise opportunity, always bank on recognizable brand names. The growth potential may be higher with new companies, but so are the chances of failure. With recognizable names in the industry, your chances of success are almost guaranteed.