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Is Franchising Scary?
Written by: John PowerArticle Overview: You really shouldn't be afraid of starting a franchise development program.
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Free Download - Franchising as an Alternative to an IPO? By John Power |
Is Franchising Scary?
Financial: If the cost of the franchise development program may put the business at risk without franchise sales, or if the reason to franchise is to “save” a struggling business, perhaps the decision to franchise should be postponed.
Otherwise, the cost of a franchise development program is not normally excessive for successful businesses. Starting a franchise program is much less costly than expanding to a new city or starting a new department. The start-up costs are manageable, and fixed overhead is minimal. Most franchisors will recover the initial franchise set-up costs when they sell just one or two franchises, and will then generate income, oftentimes substantial income.
Franchisees: One of the purposes of the Franchise Disclosure Document (FDD) is to provide the franchisee with enough information to be able to make an informed decision about buying the franchise. If the FDD is clearly and properly written and followed, misunderstandings by franchisees will be minimized, and thus potential franchisee problems can be reduced.
Summary: Operating any business has certain concerns, and franchising does not necessarily increase those concerns. Business owners take on some risk when they sign leases, hire employees, and operate a business. But business risks can usually be managed with good planning and decisions. Franchising can be a very desirable business decision because it provides a new profit area.
When developed in an orderly and proper manner, franchising offers an outstanding opportunity for growth and income. We do not believe that becoming a franchisor involves much more risk than any other business activity, and that it should not be considered as scary. The challenges can be considered to be small compared to the income potential.
More information can be found at: www.biltmorefranchise.com
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Article Tags: business activity, business decision, business owners, business risks, desirable business, disclosure document, fdd, franchise development, franchise disclosure, franchise program, franchise sales, franchisee, franchisees, franchisor, franchisors, initial franchise, misunderstandings, proper manner, sign leases, substantial income
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About the Author: John Power RSS for John's articles - Visit John's website  Click here to visit John's website   Franchise Formats Franchise System Specifications International Franchise Expansion Franchising Like a Fun Hike Franchisees are Independent |
Related Forum Posts
Re: Re Franchise etc
- [quote="bmueller47":e0j0nu4t]Can you see a shift of various types of franchises? What I am thinking about is that today it is more difficult to create franchises, that has great appeal. More and more people want to have their business, but no interference of someone else.[/quote:e0j0nu4t]
Not sure what you mean exactly but it is certain that more and more people want to have their own business but not more and more people know what they really want to do, or how to do it. And that's what franchising is all about. Franchising is not for an entrepreneur. An entrepreneur will do his own thing. People who buy franchises want a turn key business, with a proven model. Franchising in the US had never been that good. I don't have the exact numbers in mind but I know for sure that franchising is growing more and more as people are getting more and more aware of this business model.
Franchising vs. Licensing?
- What is your opinion on Franchising vs. Licensing? Which is better?
Nominations for a new Franchising Moderator!
- Is there anyone you'd like to nominate as our Franchising Moderator (or volunteers for the position)?
Great Article, chock full of info.
- Ian,
Thank you for linking your article regarding Licensing vs Franchising.
Its a good read.
Re: Hello from Captain Franchise
- Hi BuzzAroundBooks,
I actually found the site in my search for franchise networking. We're looking to make connections and also inform the general public about franchising. Franchising is often misunderstood because of the lack of knowledge. We're here to help and learn as well!
Thanks!
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