Marth Leahey

Have you ever wondered who is a franchisee and what is a franchise? These are very common terms for people who are a part of business and the business already has a good branding. Let us delve deeper into what is a franchise and who is a franchisee.

what is a franchise? A franchise is an authorization that is granted by a business or a company to a group of individuals or an individual to carry out the commercial activities that are carried out by this business.

There are different forms of doing business and franchising is one medium through which business can be conducted. It is hailed as a popular method and a powerful marketing tool too for huge businesses to go on an expansion mode for their business and by doing so enhance their market share considerably with rapid speed but with low costs. There are different types of franchise options that people can find out in the market but identifying the one that gives them great returns is the key to success. There are the distributorships, brand name licensing or trademark options and the business format franchises.

The franchisor offers the franchise with the license to sell the products or services and also implement similar business techniques. The franchisee pays an initial amount to get this right and from there on he pays a certain percentage of the gross sale to the franchisor. This agreement may last through the term decided upon in the contract. The franchisee gains all those privileges that the franchisor’s business has and in addition to that will also receive pertinent training in the relevant field. Coupled to this training the franchise will also continue to receive ongoing support. Of course, there are a few additional responsibilities too which the franchisee has to be careful about.

The franchisee has to work towards meeting all the quality controls that have been set up by the franchisor for it is the brand reputation that may be at stake when things are not done in line with the guidelines provided by the franchisor. There may also be a few restrictions on the kind of sales and operations they can perform on the name of the company.

A master franchisee can truly be a very lucrative option if you are contemplating on franchising. But in order to get to this lucrative option one needs to definitely understand the kind of nuances that are involved in the same. Master franchising is one avenue through which corporations or people can purchase the rights in order to sub franchise the business in a given area or territory. The person who offers this franchisee to the sub franchisors becomes the master franchisee for that area. By doing so, the master franchisee will be able to generate decent business as well as profits in fairly short time frame.

One thing that we need to remember here is that not all franchisors offer the facility to sub franchise or give the franchisee the opportunity to become a master franchisee. The master franchisee is given the duty of recruiting other franchisees for the business in a given area. He will purchase the rights for the given territory and the area will come into his purview and he will be the benefactor of a certain percentage of the profits generated too from the territory.

what is a master franchisee? When you understand this perfectly you will also be able to get a fair understanding of the different advantages that come along with it. As an investor you will be able to partake in the business concept which has already been developed. You will also get an opportunity to partner with a large entity as a master franchisee receive all the expertise and support that is needed from the franchisor.

But, there are a lot of upfront costs which you need to be ready to bear but once you are ready with that you can be assured of extensive growth potential when compared to the traditional franchise. When you are seriously contemplating to get into franchising, it is essential that you conduct a keen search of the various types of franchising options that are available in the market. For, there are many worst franchises too that are available and you may fall prey to them if you are not careful about your choice.

Just as a coin has two sides, franchising also has its own share of the pluses and minuses. There are a few franchise problems that the franchise owners need to be cautious about when they seriously get into the trade. No doubt, being one’s own boss is very appealing; working at your own timings is also very appealing. But, there may be a few disadvantages too in owning a franchise. Sure, a franchise gives you the necessary impetus to take your business forward but there are other hiccups like funds, time, labor and staff to consider when you own a franchise.

It is true that there is low failure rate as far as having a franchise is concerned. But, the main hitch is with the exorbitant rates that one has to put in when they have to acquire the franchise. And it does not stop at the initial investment for the franchise owner has to think about getting the stock and running the business later with some manual help in the store too. All this would call for some kind of expenses. Therefore owning a franchise means planning well in advance of all such kind of expenses that may become a part and parcel of the business you have acquired.

However, if you are contemplating on owning a franchise that is home based, you can rest assured that your initial costs also will be low. And then there are scams that you may be very cautious about. Put your time into investigating the facts about the franchise that you are going to take. In fact there are a number of websites on the internet that will take you to the official sites of franchises wherein you can get an understanding of the true potential of the franchise.

A few franchisors are very much concerned just till the time you give your initial investment to them rather than they directing you on the way your business could be expanded. In such a situation you will definitely be left in the lurch not knowing in which direction to go. There is also a possibility that a franchise may be available to you at a suspiciously cheap price. In such cases get the official documentation that will prove the veracity of the entire setup. Even if the initial costs are dead cheap and you have not paid a whopping initial fee, loss would definitely be a loss.

There are a plethora of opportunities to make money by doing business. And whether you succeed or not depends on the channel you choose. Franchising also has thrown open many avenues to people who are looking for making some solid money. In this article we will make an attempt to understand the many benefits of a franchise business.

Franchising has been doing rounds right from the time man has started engaging in the commercial enterprise. Only change it has undergone is that it evolved into a sophisticated business format in the given time. In order to understand the benefits of a franchise business it is essential to understand what a franchise is. It is nothing but a convenient business arrangement between the franchisor or the owner of a given business concept and the franchisees who are given the right to work on the concept of the franchisor’s business, use his trademark and share a certain percentage of profit with him.

By doing so, the franchisee is getting the name and trademark that have already been established work in his favor. The franchisee does not have to start from the scratch for the brand is an already established one. This however depends on the fact that whether you have chosen an already established and proven franchise or you have chosen a fairly new franchise that still has to make a mark.

The primary benefit of a franchise business is nothing but minimization of risk. Embarking on a new business without adequate support is very risky. Research has proved that majority of businesses shut shop within a span of two to three years. The main reason for such high failure is that the owners are unable to keep up with the learning demands that the business owner has to make. However, franchising provides an opportunity for learning and training as well and thus rates of tasting success with the help of franchising are relatively high.

Another major benefit that one could witness when they get into a franchise business is that the kind of investment you wish to make can be heavily researched upon. There is indeed a wealth of information regarding the franchising avenues that exist in the market.

Forget about starting up an all new business. You can easily generate income by opting for a new franchise. There are numerous franchise options that are available on and off the web too. It is therefore your choice to come up with the best franchise option. Franchising is thought of as a business model that has great potential. But, it is very important to understand the upside and the downside of any kind of a business you wish to undertake. Just as there are two sides to a given coin, there are also the good and bad about going in for franchising. In this article we are going to delve deep into what are the disadvantages of franchising.

No doubt franchising has a whole lot of benefits as it comes along with a whole lot of proven ideas and most importantly huge brand names. But, the franchisor may still run the entire show which you may not appreciate at all times. It is only after you enter into the business that you will be fully able to arrive at the costs of the business and by that time it would be too late. Yes, the franchise costs may be really high than you have expected for you will have to think about the initial costs while buying the franchise, the setting up costs and buying the stock from the franchisor.

what are the disadvantages of franchising? You need to assess them from the franchisor perspective as well as from the franchisee perspective. There is always the risk of getting exposed to lability for the various acts, omissions and negligence of the franchisor that may put the franchisee also into risk. One has to understand if the franchise is a company owned unit or an independent franchise unit.

To state in a nutshell, franchising is not an all perfect business opportunity. It is also not a completely problem free solution either. However, it gives a great opportunity to expand on other’s thoughts and business models. If you are envisioning a franchising program, it is essential that you consider both advantages as well as disadvantages too. You should remember one thing that there is no best franchise that will give you a perfect 10 on 10 every time. However, let not the negatives put off the new option of franchising for you because it is found to be highly useful and effective method for any kind of business expansion. Only thing that is needed is proper development, analysis and planning.

Making a foray into an unknown territory would send the alarm bells ringing in the minds. But what if you get into an already trodden path? The risks though exist, may be few and there are people who have already tackled them. If you are seriously pondering about what are the advantages of franchising, then this is the big advantage. You are not the only one battling it out with a totally new concept or a business idea. There are already people who are into it, have tested and tried it and tasted success too. By opting for a franchise you are associating yourself with an already existing brand and business thereby trying to make a source of income out of it.

With the consolation that the main basis of the business has been a proven idea you can embark onto the new venture with a sense of confidence. Just imagine what your plight would be if you make a foray into a totally unknown territory, with no leader to lead how you could go about the business. It would all become a case of trial and error and in the mean time you may burn a big hole in your pocket. But with the franchising system of taking over business, you are assured of a safe start.

When you have to explain to someone about What are the Advantages of Franchising, you can also tell them that you would be associating yourself with a well recognized brand name as well as trade mark too. You will not have to separately fend for advertising and promoting strategies because the franchisor will take care of the entire stuff. And perhaps this will be accomplished in a highly professional way with the help of experts in the field of marketing and advertising. If you were on a business of your own it is you who will have to think about all these aspects and you will have to set aside a said amount towards ad spend. And spending beyond a certain limit would definitely mean a pinch on your budget.

We are all very well aware of the fact that franchising gives a wonderful business opportunity. But, what are the many advantages that one will get when they opt for a home based franchise? Let us take a closer look at the same.

When you buy a franchise there are numerous factors that you need to take into account. You need to weigh the pros and cons of all the probabilities and then take a definite step in the direction of one option. And out of such options that are available home based franchise is one.

Home based franchise has become a popular choice by many people for the kind of benefits it brings along. It is not only the low initial fees that come very well within the budget but also the aspect of being your own boss that attracts many of the people. Working out of home would definitely call for renting an office and also employing some people as staff. This means an additional expense. But with a home based franchise, you do not have to rent a place at all and as you are starting off with a low budget you can manage on your own for the time being.

You can save on the daily commute. And by doing so you are also saving on the fuel expenses and time too. There is no boss who is breathing down your neck for work. You can easily space out your things to do and work accordingly so that you meet your priorities right. You can choose your hours of work. There is no office politics that you need to be worried about. As there are quite a number of advantages with investing in a home based franchise it definitely helps to consider the various essential features before you buy a franchise.

Franchising has caught up with many people owing to the lucrative aspect that is involved in it. Being the owner of a famous franchise brings along with it numerous benefits. When you are a part of one of the highly successful franchises you can rest assured that there will not be many pitfalls that are generally associated with those businesses which you have to begin from scratch. You will definitely consider the successful franchises alone before you actually get into the franchising business. The franchisor would definitely share all the training practices with you and this will keep you in a good stead to do the business. There is also adequate support available from the franchisor and you do not have to worry about all these characteristics.

All you have to be careful about is to find out if you really have the drive to run the business. First and foremost you need to have the adequate communication skills if you want to own a franchise. Dealing with people in the appropriate manner is a must and if your communication is not proper, you can have it assured that you may not be able to go long in the business.

Successful franchises are also built because the franchisees are hard working. Sometimes it may take a lot of your time. So, you must not be afraid of putting in more number of hours of work to get the work accomplished. Adhering to the marketing strategies of the franchisor is very important as you are carrying forward the tradition set by the franchisor’s business. Even if you have a brilliant idea, you may discuss it during a meeting with the franchisor but you should not deviate from the plan that has been put forth by your franchisor.

It is a general notion that popular franchises will definitely bring success to the new franchisee. But how much of reality is there in this notion? Do all popular franchises spin the same magic in every territory? Let us take a keener look as to what is essential for a franchise to get popular.

No doubt popular names, brands and companies draw huge hordes of people seeking to be associated with them. There is always a behind the scenes activity that either makes or mars a company, person or a franchise or a brand for that matter. The franchisor may be outstanding providing great inputs for the franchisee to take the business forward. But there is a problem with the franchisee himself. Or it could perhaps be the other way round too. Despite having your heart, soul and money into the franchise you have bought, the franchisor may not reciprocate in the same manner. There may be many other factors too that would decide the fate of the franchise in a given territory.

A franchise may perform well in a certain geographical location and this does not mean that it has to performance in similar lines elsewhere too. therefore rather than just going by the popular franchises it is essential that the prospective franchisee weigh the pros and cons of having that kind of a business in the existing scenario and in the existing place.

If you have made your choice on the basis of popular franchises you may soon be in soup for the product that you have chosen may just end up being a fad. Therefore there are many pointers that one has to consider before zeroing down on a particular franchise. That is why gathering relevant franchise information becomes highly crucial and critical as well.

A new franchise means a new opportunity that is found to have a lot of potential in generating a steady channel of income. It calls for a certain amount of investment which is going to bring about both profits and losses that you need to carefully gauge. When we look at it with a positive outlook, a new franchise is always a new opportunity for the new investor.

It becomes highly essential to choose such a franchise that has a positive track record and gives an opportunity for solid investment. The franchisor will provide the new franchisees with the relevant supplies that involve in taking the business forward. Branding, marketing, coming up with business plans, management and leadership training will all be taken care of by the franchisor.

Franchisors are making use of social media platforms to have a wider reach to their customers. They are attracting many franchisee prospects too which is found rampant on Craigslist, YouTube, Facebook and LinkedIn. The person interested in new franchise will have to pay the franchise fees and acquire the same. For a first time investor, it is the low cost franchises that offer an attractive proposal. Finding the ideal franchise is a daunting task and you will have to put in your efforts, time and money too. But when you have spotted a successful franchise, you can consider that your battle is half won. For, you have a trodden path in front of you and it has delivered good results for others.

As mentioned earlier, when you opt for a new franchise, there is no need for you to begin from scratch. The path and the business plan are absolutely clear and you already have a brand name to take your business further. The only thing you need to consider is the franchise fees. There is a substantive fee that is charged by the franchise owners so that the initial startup costs are covered up. And needless to mention the franchise fees varies from business to business. Obviously, a fee that is set very high will make the prospective franchisees think twice. The new franchise owner will have to consider the initial franchise fee, royalty fees and advertising fees too. In addition to paying the franchise fees, the franchise owner also has to think about procuring equipment, operational capital, building and signage, marketing and training costs too.

If you are seriously contemplating on taking the route of franchising to make some money, then you must first consider how to buy a franchise and that too, a good franchise that works for you. And needless to say all this would call for investment of time and energy to arrive at the right franchise which you wish to buy to forward your business interests. No doubt there are numerous franchise opportunities out there in the market. There are quite a number of those that have bombed too. They have failed because the franchisees did not work on them with due diligence before they actually got into buying the franchise.

Here are a few things you need to consider when you are pondering on how to buy a franchise:

• The challenge of buying the best franchise is indeed enormous, both mentally and physically. Firstly, you need to understand the kind of franchise you wish to invest in. Then, get a thorough idea of the kind of financial capability you are bestowed with. Do you have to opt for a loan or you have the funds ready? If you do not have the funds you may obtain the capital from a financial institution.

• Speak to the representative of the franchise or the franchisor himself if he is accessible. Fix up an appointment with the concerned people in order to gather details and get to the depth of the business.

• Once you are convinced with the entire concept and you have gathered franchise information on training, support and other related matters you may decide to fill in the formal franchise application. Once you fill this then it will be forwarded for credit check as well as background check.

• When the guidelines of the franchisor are successfully met with, a disclosure document called the FDD…Franchise Disclosure Document is sent. There is actually a lot of information available here that state the principles, litigations, franchise openings and closings, franchise agreement and many more.

• And once you are convinced about all the intricate details of franchising the given business, you may sign up the agreement.

First off, let us understand what a franchise agreement is. A franchise agreement is a pact between the franchisor and the franchisee. The agreement states in a very lucid manner the rights and responsibilities that each of these parties have. It is highly essential to learn all the nuances of franchising and what the franchisor is offering you at the time of agreement itself. Before you actually sign the agreement, it is also mandatory that you go through the Franchise Disclosure Document…the FDD. There is a rule that the franchisor give the FDD to the franchisee well in advance so that the can facilitate the franchise to sign the agreement. So, take your time and read up the franchise agreement thoroughly and then only sign. The agreement however may differ based upon the franchise system and the state jurisdiction the parties belong to.

The FDD gives lucid information about what one could expect from the pact…the franchisor and the franchisee’s name, the kind of franchise that is being bought, details of the past performance of the franchisor with the project, the territory, marketing and advertising tactics and the kind of support that would be extended to the franchisee and other relevant information too.

There are certain aspects in the franchise agreement that you need to throw more concentration on…the initial fees, the franchisee’s obligations, litigations, franchisor’s obligations and earnings claims. You are entitled to learn more about the financial performance of the business and this in the form of a document would give you a clearer picture. A good franchise agreement will contain all these and many more which will make your association with the franchisor a transparent one.

Ensure that the franchisor is genuine and is carrying out the business legitimately. Do not jump at the very first opportunity that you get to buy a franchise. It definitely takes more than that. And if you come across a free franchise option too, do not jump into the bandwagon but exercise care and caution while you ascertain the veracity of the opportunity that is being thrown open to the people. There are many ways and means in which franchisors choose to make money. And bad franchise is one way in which you can find yourself in deep trouble.

What is one great way that will help you discover the right business channel so that you can earn more money? Attending a franchise expo would definitely do it for you. Yes, attending a franchise expo will give you the right platform to explore the possibilities that are there in the field, and will also make you notice that there are so many others like you who want to embark into the field of owning a franchise. This will be your first step towards understanding what the franchisors have in store for the prospective franchisees. And your eventual success depends on the kind of choice you make after attending the expo.

There are good franchises, popular franchises, bad franchises and successful franchises. Key remains in finding out the best one that would not burn a hole in your pocket. The expo will give you an opportunity to interact with franchisors from different areas and with different concepts. You can gather all the substance, go back and ponder the various possibilities that you have at your disposal. The underlying fact that you need to arrive at is the kind of profitability you would make if you had taken up a particular franchise. When you have a clear understanding of the same you may go ahead with further rounds of talk with the franchisor.

Identifying your area of interest will reduce your confusion when you attend the franchise expo. Otherwise you will be bombarded with too many avenues which will leave you thoroughly confused. There will be many educational seminars that will be conducted in such expos which will help you in getting a comprehensive understanding of what franchising exactly is. In short, attending a franchise expo will definitely help you in numerous ways. You will not only be able to identify the business you wish to do but also learn how you could arrive at picking up a good franchise.

Franchise 500 will give a sneak peek into the kind of franchises that have become successful over a period of time. There are various aspects that will be taken into consideration before a franchise makes it to the top Franchise 500 list. The financial solidity that it offers, the growth rate it has registered, the startup fees, the kind of litigations involved, the time since the franchise is operating.