What Are the Elements of a Good Franchise Investment

If one wants to venture in the franchise business, it is important to know what are the elements that make a good franchise investment. If one is the ...


If one wants to venture in the franchise business, it is important to know what are the elements that make a good franchise investment. If one is the financial means, the yearning to learn and be a successful entrepreneur, then perhaps franchising investment is the way for you.

A franchise investment should consider a lot of things. Here are some of them:

The franchisor should have operated the system successfully for at least five years and has a number of established franchises in multiple locations.

Be sure to have a franchise attorney with you to check over the franchise contract and see if it is balanced and fair. Ask the lawyer if there are any terms in the franchise agreement that can be changed or negotiated. If there aren’t any, then perhaps let the attorney check if there are any irregularities or issues before signing it. A good franchise investment should yield positive results despite economic slow down. In addition, a good investment should not be tied up by lawsuits from dissatisfied franchisees.

A good franchise investment should consider location. It is important to include lease and rentals in your budget. More often than not, a usual lease runs up to five to ten years.

Finally, a good franchising investment must have a saleable product. Since they already have an established system or brand name, they usually provide quality supplies and offer discounts. The quality control is handled by the franchise so as to protect you from inferior qualities, thus easing your burden in checking the quality of the product being sold.

Various industries offer a lot of franchise investment opportunities. There are a lot of materials that one can check to find the suitable franchise investment. Some of them include travel and recreation, financial services, fast foods, restaurants, clothing stores, and many more. It is your choice to look for a suitable financial investment.

Want to Open a Fast Food Franchise


Franchising is more of a relationship i business between the franchisee and the franchiser. The franchiser allows the franchisee to use his concepts, business system, brand name, trademark, advertising and marketing plan. The franchiser gets a percentage of the franchisee’s gross income and royalties in return. One popular franchising system is the fast food franchise. Fast food companies such as McDonald’s, Burger King and Wendy’s are operated this way. If you want to open your own fast food franchise, here are some of the things that you need to know in order to be on your way to owning your own fast food franchise.

Research your franchise options and select the one you’d like to operate. There are various fast food franchises available each with its own requirements for new franchisees. You must inquire into all of them to compare which fast food franchise perfectly suits you.

Formulate a budget carefully. As a basis, most franchise company provide a set amount of budget for you to prepare. These budget plans are laid out according to the number of employees you want, how big your establishment will be, and where the location is. Fast food franchise budget is expensive in terms of food preparation because you have to meet the standards of the franchiser.

If you already have the right amount of budget available, then well and good. If you don’t have it yet, then you can get a loan from a bank. To do this, you must prepare a comprehensive business plan as well as all the information about the franchise.

Everything from the building design to the training of the staff should be included to meet all the requirements of the fast food franchise. Most fast food franchise package includes the training and human resource management of the staff to avoid inconvenience.

Ask if the franchise company have a client support. Mostly, fast food franchise company aid starting franchisees until they can thrive on their own. Such assistance will be very crucial especially if you are relatively new to the business. Since you are paying royalty money, why not make the most out of it.

Selective Franchise Services


Thoughts of being your own boss by having your own franchise business always enter in your head? A franchise business in a way is better than having a start up business because the franchise business has a brand name and the franchiser is in charge of marketing it. There are various types of franchise services, it is important to find what is apt for you.

So what are the different business franchise services available out there? Well, you can certainly name a lot since almost every industry have their own franchising companies. So that makes it easier to choose which franchise service you can start.

But it also makes it equally hard if you are not planning it carefully and giving it a lot of forethought.

You wouldn’t want to be starting franchise business that you can’t sustain your interest in the long run don’t you?

Different franchise services include fast food and house cleaning services. Since the computer industry is an up and coming market, franchise services that cater to them have started to sprout. There are also franchise services that cater to pets, their food, grooming and other services. The beauty sector is also filled with franchise services ranging from hair salons that cater to hair fashion to even dermatological clinics that cater to skin care. The travel sector is a beneficiary of the franchise service business since some of their products are from travel franchisor companies that provide and sell travel related services. The possibilities of selecting a franchise service business is limitless, it’s just a matter of selecting carefully.

So how will you choose from among the business franchise services you would like to operate? Make sure you pick something that you would be interested so you can maintain sustainable growth. Running a franchise service requires a lot of dedication and constant innovation. It is important that one is familiar and knows what is he or she getting into before signing an agreement with the franchisor. Second, you have to research the most viable franchise business to operate in your location or any location that you choose. Once you put all of these things together, then it’s time to own a franchise business.

Risks When Owning a Franchise


Owning a franchise business needs special attention. Studying the advantages and disadvantages of the business you are interested in because doing research will help you a lot if you highly consider owning a franchise business.

All businesses have risks and owning a franchise is no different. But what is crucial is to weigh these against the benefits and see what’s most important to you as a business owner.

Most of the time, a franchiser restricts your ability to do your own marketing. If you are a creative marketer, you may feel as if all of it has been sucked dry from your business. Before you go off owning a franchise, read through all the franchiser’s rules and regulations for your business. Franchisers also take a significant amount off from your profits. Normally, even if the business is doing well and earning big, you will only see little profit.

There is also a lock-in period in most of the franchisers agreement. This arrangement may not be beneficial for you especially at the current economic standing. You will have to pay several fees if you get out of the business too early due too personal crisis or slow sales. Figuring out the fees and penalties that the franchisers included in the agreement is a valuable information. You can never tell what may happen in the future even if you don’t want to close the business early.

Owning a franchise does not guarantee that you will succeed. There is a huge risk involved in it like any other business. The franchisers support will also be the basis of this. You must also consider several factors like location, the type of service, and the economic climate that you are into.

Research the area where you plan to build your own franchise business. Ask local business owners about the status of their business. If you think you have weighed all the risks involved, it’s time to contemplate whether you should continue to pursue owning a franchise business.

Looking for Franchise Consultants


Franchise solutions company employs franchise consultants that are assets to the company when it comes to meeting business opportunity goals. A franchise consultant should be good and efficient in maximizing outputs for your franchising business.

So how can you distinguish a credible franchise consultant from a disreputable one? Here are some characteristics and qualifications will help you clear the dust.

A good franchise consultant should have a lengthy experience in the industry of franchise consultation. The more the franchise consultant knows about franchising and business ownership, the better a franchise consultant will be in helping you find one that will fit your style an preferences perfectly. A franchise consultant should have experienced being a franchisee or being part of a franchisor’s team.

Franchise consultation is not a walk in the park and it certainly is not a part time gig. A consultant should have a professional track record and have been involve in this particular field for a long time.

It is better to reconsider hiring the services of the consultant if he or she is already giving out recommendations without listening to your needs. A good franchise consultant should be able to listen to your needs and goals before giving a specific recommendation on the next course of action.

It is important to be results-oriented in screening for consultants. If they worked with credible franchisors and are able to select the proper franchisees, then there is no hassle for you to worry that they cannot do the same thing for you.

A franchise consultant who has weathered all trials and tribulations has a good knowledge of ethical business practices and quality service. You can also interview consultants first before you avail of their services to see if you can make a connection and if they have the appropriate knowledge and skills needed to help you in this crucial business decision that you will make.

Franchise Solutions Companies


For those who are interested in going to the franchising business, it is advisable to look at business franchising solutions. These companies provide counseling and advice so that interested franchisers can jump start their business immediately.

So what does a franchise solutions company offer? Well for starters, they get to ask questions about what your goals are, what type of franchise business you prefer, and how much is your budget.

All these things and other factors are needed by the franchise solutions company in order to help you determine what type of business franchise you should endeavor.

The franchise solutions company also helps you with the negotiations with franchisers in the franchise agreement. Since some franchisers are willing to alter some of their terms within the contract, the franchise solutions company will help you in ascertaining which terms are beneficial, which are questionable, and which ones can be altered to meet your capabilities.

Franchise solutions companies lend their franchise consultants to you to be meet up with you and discuss your business franchise plans and goals. The franchise solutions consultant would be there with you every step of the way from planning to negotiations. Franchise solution agents are adept on different areas of franchising. Some are very familiar with restaurant franchising while others are more comfortable with retail franchise business. The experts are diverse in every field of franchising and the franchising solutions company will provide you with what you need.

A good franchise solutions company does not grow on trees so how does one find them? The first step is to look at the company’s track record to check if it has a sterling performance. They should have been in the business for a long time and their service should have yielded excellent results. The next thing to look for is if the franchising solution is there to explain even the minute details and the benefits, this is a sign that they are with you 24/7.

Good franchise solutions company won’t go AWOL while you are knee-deep in negotiations. Finally a good franchise solutions company won’t leave you with just your shirt on your back.

It is advisable to seek out a franchise solutions company’s assistance if you are a newbie in the industry of franchise businesses. There are already successful business individuals who continue to patronize franchise solutions company.

Franchise Law and its Concepts


Franchise laws are all about the legal relationship between a franchisee, a person willing to sell the product of a company or franchisor.

The Franchise laws not only discuss the relationship between the franchisor and the franchisee but the franchisee’s relationship with its employees and other third party elements.

In a franchise system, a person may buy the right to sell a product of a licensed company or franchisor. But unlike normal resale systems, a franchisee sells the products or services of the franchisor under the franchisor’s trademark, trade name or brand name. Franchise law is the body of law developed to regulate the relationship between the franchisee and the franchisor.

Franchise law is regulated by federal statutes or in the US, is popularly known as the Federal Trade Commission or FTC. Additionally, each region enforces its own laws that affect the legal relationship of franchisors and franchisees within those areas. Courts also apply rulings and decisions that directly affect the franchising system. Since there are various regional or state laws, franchise law interpretation can be varied from one state to another or even one country from another. A franchise law may be considered valid and must be enforced in its state of origin but it can be considered illegal and must not be practiced in a neighboring region.

Franchise law is very distinct due to the unique relationship of franchisor and franchisee. Even though it has evolved and practiced in every states, it still has to adhere to other legal specialty areas. To be adept with franchise laws, one must also be familiar with the following laws, business laws, contract laws, trademark laws, collections law, international law, administrative law and customs.

If one is interested in a franchise, it is important to consult a legal expert on franchise law. Every time you enter into dealings with franchisors, you need to have the advice of a franchise lawyer and if necessary, they should be present whenever you are talking to the franchisors. An average lawyer may not specialize in franchise law.

Franchise Agreement


You have to make sure that you understand all the contents of a franchise agreement before signing it. It is a legal contract the binds both parties, the franchiser and franchisee, to satisfy all their obligations to each other.

Before concurring into any franchise agreement you should be comfortable with all the stipulations demanded. You must have with you a franchise attorney so that you can see what your options are and what terms can be negotiated. Before you arrive to the point where you are negotiating your franchise agreement, there are steps that need to be observed.

Be sure that the franchisor will allow negotiations with the terms of agreement. There are some franchisors who openly express they are not open to negotiations while there are some who are open to negotiations. In order to protect yourself make sure your franchise attorney reviews the agreement to identify any possible issues even though you cannot negotiate the agreement.

You must be aware that there are some non-negotiable terms in a franchise agreement. Royalty fees, territory size, termination provisions and length of the agreements are a few examples of non-negotiable terms. These are what we call the untouchable provisions. You can hardly find a franchisor who will agree to negotiate these provisions.

Ask your franchisor if you will not be held liable for any loss or damages that are not caused by any of your employees or you. You can request for a written document so that it be easily comprehend by both parties together with their lawyers.

Do not forget to review the provisions that require you to spend a set amount of money on advertising. There are some franchisors that offer discounts on first few years of operations.

Be sure to consult your lawyer if you have some questions on some sections that need to be changed or deleted. Keep in mind that the agreement is complicated and has a tendency to favor the franchisor. Now before you sign on the dotted line, make sure you fully understand your obligations and comfortable with the final agreement.

Advantages of Franchising


Franchising has become one of the current trends in starting a business. Franchising is being pursued by budding entrepreneurs for many reasons. But do we really understand the advantages of franchising and is it really a good choice of business?

One of the advantages of franchising is that the power behind the brand name. Every year, billions of dollars are spent on advertising and marketing brand names of companies. This is because they yield really good results. A good brand name stands for quality and consumer trust. Brand names give the consumers the promise of a dependable and consistent high quality products and services.

Franchising is also advantageous in the sense that it already has a proven business system. Within the first 3-5 years of operating a new business, statistics have shown that it will most likely fail. This is because the business have to compete with many brands in the market that has been around for years. In addition, young business owners have so much to learn about managing a business before losing funds. Getting a franchise business makes it easier for aspiring entrepreneurs to make their business thrive, you can use a pre-formatted business system that includes the daily operations, marketing, accounting, and distribution.

Lastly, the best advantage of franchising is that franchise chains have more substantial buying power than a solo or single business. This entails that you have access to equipment and resources to operate the business and you can get them for a much lower price. Most franchise business created a support system that will help business owners to run the business smoothly. As soon an entrepreneur decided to buy a franchise, he or she will be given proper training about the basics of the industry and even teach them how to manage the company to thrive. The franchise company are also responsible about the marketing aspect of the business, so it wouldn’t be too hard for entrepreneurs to promote their business.

These are just some of the definitive advantages of franchising. If you are starting-up a business, then its better to choose a business franchise instead.