| Why buy a franchise? |
| You're dissatisfied with the way
you're being treated by your company. Perhaps you're an executive who has
been displaced. You've had the idea of owning your own business as a solution
to these and other issues but you've heard about the failure rates of independent
businesses. A franchise may be the answer for you. |
| Franchising is nothing more or less
than a business strategy for getting and keeping customers. It is a marketing
system for creating an image in the minds of customers about the company's
services. Franchising is a network of interdependent business relationships
that allows a number of people to share a brand identification and a successful
method of doing business. |
| For the franchisee, franchising
is about risk reduction and safety. You give up the total freedom associated
with being an “independent owner” to become part of a group of people committed
to building a brand and dominating markets using a common, tested operating
system. You don't have to guess about the most effective way to build your
business, there is a specific system to use. |
| The franchisor provides a proven
method of doing business (the operating system), a brand or trademark that
will have value in the eyes of the customer based on execution of the operating
system, and initial and ongoing support so you won't have to reinvent the
wheel to be successful. |
| A franchise system should also provide
faster growth due to tested marketing programs, predictable results based
on your adherence to the operating system and less risk of your invested
capital. The trade offs for you are the fees you pay the franchisor for
the operating license and the restrictions you will deal with on the method
of operating the business. |
| The Bottom Line - ask yourself if
you would rather own a McDonald's or an independent burger drive-in. The
answer to that question will tell you whether franchising is worth exploring
for you. |
| What to expect from your franchisor? |
| A franchisee should expect a franchisor
to have a successful system that can be easily learnt from the franchisor.
The reason for becoming part of a franchise system is to minimize the risk
in starting a new business. |
| You should expect that your franchisor
is someone with whom you feel compatible and that the company's vision
of the future is compatible with yours. It is very important that you believe
in the future plans of the franchise. |
| You should make sure your franchise
agreements are fair. The franchisor has developed a business that you want
to duplicate. In return for training and support, the franchisor will want
to control certain parts of the system and the way you do business. However,
make sure it is a two way street. |
| You should expect your franchisor
to provide excellent training. The main reason for buying a franchise is
to utilize a proven system. Most franchises will teach you about business
generally and about the franchisor's business specifically. |
| Your franchisor should visit you
and help you at your location, both when you are opening your business
and afterwards. The purpose of the franchise fee is to acquire the license
to operate your franchise and to cover the costs that the franchisor incurs
in getting you into business. |
| You should expect your franchisor
to have the name recognition, and growth possibilities that are needed
to give you an advantage in a competitive market. |
| You should expect your franchisor
to be geared up for the future. It's not enough to have a system that works
well today and has succeeded up to now. Your franchisor must have a clear
vision of the future, and you must believe in that vision before you enter
into the franchise relationship. |
| You should expect your franchisor
to think of you as a "partner", as well as a customer. |
