Information About Right Franchise Business
Thursday, August 11, 2011
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Information About Right Franchise Business
Factors to Lookout for Before Starting Franchise Business
Statistics suggest that 32% of franchise businesses fail because of lack of research done on part of the franchisee. While opting for a business, there are certain factors which one has to lookout for.
Research
Yes, this keyword will never leave you because for every suitable option you have to research. Why? When you are looking for a franchise operation you need to know as to what you would like to operate. It's true that you should do something in which lies your passion but at the same time, you should be a better judge of which business can give you better profits.
Expertise
It also pays if you are an expert of some field. Like before opting for a franchise, you should have detailed knowledge about the operations, industry growth and demand. For example, if you are keen on opening a restaurant then it's better if you have experience in food industry as a chef or a food critic.
Goodwill
While you are selecting the franchise, do take care to find out information about the reputation of the firm. This will also help you in understanding matters about how they solve franchise conflicts, how do they charge royalty or commission, what do they expect from you as to the percentage of investment and the return which you will earn. If the firm has good share of reputation in the market then it will certainly look after it's franchisee's needs and will work as a team.
Market Hold
If the market which you want to operate in is overcrowded with popular trends or popular chain stores, try not to get in the same rut because your market share will be limited and the returns will not be profitable for you to stay in business. Therefore, as the tag line says try to be different in your approach. You can also be successful if your franchise is new like in an emerging economy when McDonald's started with their franchise operations, none of the analysts had predicted such higher market share for this chain but the idea of fast food clicked with the local people and the franchises are earning high profits.
Help by Franchiser
As you are in the process of zeroing in your favorite franchise operation, try to research about the training which will be provided by your franchiser. Also, as a franchisee which model of franchise operations you would like to work with. Do you want direct contact with the franchiser or do you want to work under master franchisee appointed by the franchiser. You should also be comfortable with the training they provide because it will make matters clear and will have no room for error. The franchiser should also try to inspect the location where you want to start your business so as to understand the importance of a perfect location.
Legal Trouble
Every franchise operation has some set of rules and regulations which you should follow. Carefully study the rules and do consult an attorney over legal matters. The laws should be understood so that law suits by both the parties can be avoided. Also check on the internet about the company's past records and whether it was involved in a lawsuit with a franchisee earlier.
Place
In marketing mix, one of the important aspect is location from the point of view of product positioning. Similarly franchising too, involves selecting a perfect place that the customer can easily reach. Selecting a realtor can certainly help you as he certainly has all the information about a location, which might help you in choosing the best location for your business setup. It's even better to collect primary data as it can help you to evaluate choices about selecting a particular location. In many cases, franchisers do prepare ground for selecting a particular location. The company itself has a dedicated team of personnel who are always on a lookout for emerging markets. These researchers have protected territory which guarantees the franchisees that they have no future threat from any competitor. Even with such well equipped facilities, it's best to hunt locations on your own as you might be able to find the best one that suits you.
Though starting any venture involves risk but it's the risk you should be willing to take as the returns, if successful, are high and better than getting a fixed salary. So start exploring ideas for choosing a perfect franchise operation
Since the multinationals started getting into niche markets, being an independent owner has lost its competitive advantage. As these companies are easily catering to the needs of every customer and are building a brand name which every customer trusts, it certainly has become a difficult game to win. So what's a safe option which can guarantee success as well as increased sales. Well, franchising is an ideal method in which the owner can work under the franchiser that is a widely acclaimed business and also enjoy rewards. The costs of opening up a franchise are low as compared to starting a new business. Franchising has many advantages which, if chosen properly, can be a successful venture.
Benefits of Opting for Franchise
The advantages of opting for a franchise are:
The advantages of opting for a franchise are:
* The brand name is already established and does not require intensive marketing activities.
* While opting for loan many of the franchisers have solid financial status which makes them a favorite among the banks.
* With good reputation in the market customers easily trust the product and you don't have to be involved in advertising from the scratch.
* Another great competitive advantage is that the franchisers offer a whole standardized setup with their expertise in all matters from finance to reaching to the customers.
* The only return they demand from you is a fee and royalty for using their name.Factors to Lookout for Before Starting Franchise Business
Statistics suggest that 32% of franchise businesses fail because of lack of research done on part of the franchisee. While opting for a business, there are certain factors which one has to lookout for.
Research
Yes, this keyword will never leave you because for every suitable option you have to research. Why? When you are looking for a franchise operation you need to know as to what you would like to operate. It's true that you should do something in which lies your passion but at the same time, you should be a better judge of which business can give you better profits.
Expertise
It also pays if you are an expert of some field. Like before opting for a franchise, you should have detailed knowledge about the operations, industry growth and demand. For example, if you are keen on opening a restaurant then it's better if you have experience in food industry as a chef or a food critic.
Goodwill
While you are selecting the franchise, do take care to find out information about the reputation of the firm. This will also help you in understanding matters about how they solve franchise conflicts, how do they charge royalty or commission, what do they expect from you as to the percentage of investment and the return which you will earn. If the firm has good share of reputation in the market then it will certainly look after it's franchisee's needs and will work as a team.
Market Hold
If the market which you want to operate in is overcrowded with popular trends or popular chain stores, try not to get in the same rut because your market share will be limited and the returns will not be profitable for you to stay in business. Therefore, as the tag line says try to be different in your approach. You can also be successful if your franchise is new like in an emerging economy when McDonald's started with their franchise operations, none of the analysts had predicted such higher market share for this chain but the idea of fast food clicked with the local people and the franchises are earning high profits.
Help by Franchiser
As you are in the process of zeroing in your favorite franchise operation, try to research about the training which will be provided by your franchiser. Also, as a franchisee which model of franchise operations you would like to work with. Do you want direct contact with the franchiser or do you want to work under master franchisee appointed by the franchiser. You should also be comfortable with the training they provide because it will make matters clear and will have no room for error. The franchiser should also try to inspect the location where you want to start your business so as to understand the importance of a perfect location.
Legal Trouble
Every franchise operation has some set of rules and regulations which you should follow. Carefully study the rules and do consult an attorney over legal matters. The laws should be understood so that law suits by both the parties can be avoided. Also check on the internet about the company's past records and whether it was involved in a lawsuit with a franchisee earlier.
Place
In marketing mix, one of the important aspect is location from the point of view of product positioning. Similarly franchising too, involves selecting a perfect place that the customer can easily reach. Selecting a realtor can certainly help you as he certainly has all the information about a location, which might help you in choosing the best location for your business setup. It's even better to collect primary data as it can help you to evaluate choices about selecting a particular location. In many cases, franchisers do prepare ground for selecting a particular location. The company itself has a dedicated team of personnel who are always on a lookout for emerging markets. These researchers have protected territory which guarantees the franchisees that they have no future threat from any competitor. Even with such well equipped facilities, it's best to hunt locations on your own as you might be able to find the best one that suits you.
Though starting any venture involves risk but it's the risk you should be willing to take as the returns, if successful, are high and better than getting a fixed salary. So start exploring ideas for choosing a perfect franchise operation
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