Thu 26 Aug 2010
Franchises - a Great Method to Own| Your Own Business
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The entrepreneurial spirit is an amazing phenomenon. It drives people to seek out a method to be their own boss and manage their personal company. These people drive the engine of economic success - small businesses. Regrettably, four out of five new businesses fail within 5 years. On the other hand, 91% of new franchises are profitable.
A franchise is really a company that is owned by an individual (franchisee) but branded by a major organization (franchiser). Start up costs in the United Kingdom range from £25,000 to £250,000. You will find on-going managing fees too. This could be a percentage of profits or inflated costs for supplies using the excess going to the franchiser. This fee covers , training, new product development and specialized management services. The theory behind franchising would be to control costs by providing a broad spectrum of goods and/or services from the franchise headquarters. The franchisee should also keep in mind to figure in rent and construction costs.
The franchiser controls the supply chain, trying to get the greatest prices for its franchisees. Occasionally this is done with national contracts and some are at the local level. In some cases the franchiser really makes products for sale in the franchise stores.
Every franchise location is under the direct control of the franchisee. Nevertheless, when buying the franchise, the franchisee agrees that he will be bound by the direction of the franchiser over marketing, quality control and good company practices. Even so, in the beginning be prepared to work long hours, have little help and be jack-of-all trades in your business.
There are three ways to purchase a franchise.
One, directly from a franchiser. Two, with the aid of a broker. A franchise broker can be helpful in that he represents many franchisers and will assist you in selecting a franchise that meets your require. Generally, they are paid a finders fee from the franchiser. 1 should be careful when utilizing a broker that he doesn’t steer you towards the businesses where his take is high. The third way is to purchase an already existing franchise. The advantages to this are you will have an opportunity to see the books, get an insiders understanding of how the franchise works and generally have much more info to work with than with a startup. On the other hand you might or may not be able to go to training at the franchiser which is a big deficit.
A franchise is an superb method to enter a business as it provide continuous support. Consumers are usually familiar having a the goods and service of a franchise. Franchises have a 91% success rate versus an independent whose five year survival rate is 20% on average. Franchising is the best of all worlds. You own and operate your company but have significant assist from the franchiser.
Find out more info about Franchise Business Opportunities at Smarta