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Benefits and Responsibilities of Franchise Ownership

Written by: Michael Hemenway

Article Overview: The benefits and responsibilities of being a franchise owner are vast. Though you get a system of business to start with, but you will be responsible, if any term of the franchise agreement is broken. The support offered by the franchisor will benefit you considerably while starting the franchise. However, it’s your responsibility to ensure that the franchise operation runs smoothly.

Benefits and Responsibilities of Franchise Ownership

Franchise business has been the traditional safety net of the Americans. Recent events have even boosted the number of people looking forward to buy a franchise. If you are also thinking about starting a franchise of your own, you must know about the franchise business itself first. There are franchise associations like International Franchise Association whose website can provide you a detailed description of different aspects of the business. You should also go through the website of FTC (Federal Trade Commission) in order to know about the various government rules regarding franchising as well as your rights as a franchisee.

Benefits of franchise ownership

The prime benefit of franchise ownership is that you don’t have to develop a business format of your own. Franchising is all about effectively transferring the franchisor’s business model to the franchisee. Hence, time and money is not wasted in perfecting a system, as it has already been done. Furthermore, there’s the benefit of the brand-name of the franchise company that is offering the franchise business for sale. So, you don’t have to create a market for your product/service; all you have to do is make people aware that you are open for business. What’s more, when you are starting a franchise, you are not alone. Best franchises always stay by the side of their franchisees and help them in the areas of market-analysis, real-estate selection, employee-hiring and marketing. And there’s also the initial training and on-going support that will be clearly spelled out in the franchise agreement. So, if you choose the right concept and work hard, success is guaranteed!

Responsibilities of franchise ownership

The benefits of franchise ownership will be fruitful only when you fulfill the responsibilities that come along with the benefits. When you buy a franchise, you are supposed to maintain the brand-name and image of the franchisor first. This is not only necessary for your success, but also for the success of other franchisees’ in the chain; as one bad egg can spoil the whole basket! Getting the required finance is another big responsibility. You should consider not only the start-up cost, but also the running expenses for the coming months together with your household expenditure. If you face monetary problem after running the franchise for a few months, then you will be responsible for the failure of the franchise. You are also responsible for hiring people and training them (top franchises will help you in this regard). You are required to make sure that the employees don’t break any rule of the franchise agreement. You are also responsible in checking out that your franchise operation is being run in the exact way the franchisor taught you during the initial training phase.

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Article Tags: business for sale, business format, business model, detailed description, estate selection, federal trade commission, franchise agreement, franchise associations, franchise business, franchise company, franchise ownership, franchisee, franchisees, franchisor, ftc, government rules, initial training, international franchise association, prime benefit, safety net



Related Forum Posts
Re: Enticing Franchises - Top 9 List - All Franchise listed above are in millions of dollars. Do you have the list of Franchise in thousands
Re: Info for would be franchisers... - [quote="Sebastien":1d29sdv1]Like Franchise Times, Franchise Update is a very practical magazine. There is no blah blah, just straight facts that anyone in the franchise community can relate to. I just want to mention that all these magazines are NOT franchisee oriented. I mean these magazines are for franchise professionals. If you're looking to buy a franchise, you won't find much information in there. To answer your question, getting published in Franchise Times was fairly easy. I don't want to brag too much but I think I am known in the franchise industry. I was the marketing guy at Franchise.com for a few years before joining my new company, the World Franchising Network. So people know me and I have a very good relationship with Nancy Weingartner, the Managing Editor at Franchise Times. I was talking with her at the last Franchise Expo South in Miami and she mentioned she'd like me to be profiled. I was like "ok, sure!". I like this franchise executive profile thing in Franchise Times as it is rarely BS. People are usually really natural in there.[/quote:1d29sdv1] Thanks for the follow up Sebastien! And I can't say that I'm surprised that networking with the right people and managing your relationships with them properly are the keys to being published. I guess the old adage holds true of "it's not who you know, but who knows you" that's important.
how much for a franchise fee? - Dear Colleague There is no easy answer to this question. Things to consider: [list=] The sizeof the Franchise Clent base Expected Turnover Intellectual Property costs (recoup) Number of Franchises Number of employees Original Set up costs Franchise admin costs An example: A franchise that I was involved in setting was to a simple "lawn mowing/home repair" franchise. The Franchise included national/local advertising - preparation of client lists - general admin - central accounting etc The Franchise involved 300-500 clients - and an annual turnover of about $300,000 . The annual franchise fee was $30,000. Hope that this gives you some idea Take care Ian[/list]
Re: Franchise Surveys - Another good tool to researching a franchise is to speak with their existing franchisees. This contact information is included in most Franchise Disclosure Documents. In order to get a Franchise Disclosure Document or FDD as it is often referred to, you will have to complete a basic franchise application. The franchisor will then usually provide you with the FDD at that time. Included in that book of information is a list of the existing franchisees, the contract, the investment information etc... This information is required by Federal Law to be disclosed to your prior to making a purchase. So be sure to do your research and start with the Franchise Documents to get the initial information.
Re: Info for would be franchisers... - [quote="Sebastien":2gam0klq][quote="BuzzAroundBooks":2gam0klq]Like Franchise Times, Franchise Update is a very practical magazine. There is no blah blah, just straight facts that anyone in the franchise community can relate to.[/quote:2gam0klq][/quote:2gam0klq] That is really what I look for in any industry publication. We lead busy lives and when people fill their magazines with fluff, not only does it benefit no one, but it makes us truly appreciate those that don't. Thanks!


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