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Pros and cons of franchise ownership

Pros and cons of franchise ownership

Every coin has two sides; similarly every business has its pros and cons. The positive side of franchising is so big that sometimes, we fail to look into the negative side while thinking about starting a franchise. But to ensure a secure future, checking out both the sides is very necessary. This way, you can understand whether franchising is suitable for you. To help you in this regard, here is a list of pros and cons of franchise ownership.

The Pros of franchise ownership

• You don’t have to start a business from the scratch. A skeleton business model is available, which you just need to fill up with your hard work and understanding of how the system works.
• The franchisor will help you at every step while you start a franchise business. When you are alone, various hassles like finding suitable real estate and writing a killer business plan can take a toll on your time and energy, which will further push back the launching of your business.
• The franchisor will provide you an estimate of how much money you will need to buy a franchise from it. But when you are alone, many times, you will find that you are staring at unpaid bills without any money source to pay them.
• Finding such an investor, who is willing to invest in a business venture of a novice, is quite difficult. But with franchising, it’s never a problem, because the name of the franchisor acts as a guarantor for the new franchisees. The scenario is even better when they go for small business franchises, as they get SBA loans for almost all their business requirements.
• The bulk purchasing power of a franchise system ensures that you get discounts from leading manufacturers and distributors.
• Developing a market position takes a long time; but with franchising, it comes easily as you are marketing the already established brand-name of the franchisor.

The Cons of franchise ownership

• Your freedom as an entrepreneur is restricted when you are a franchisee. Your franchisor may dictate you in almost everything, starting from when you open your store and what you can sell to what will be the design and color of your store!
• You may suffer loss, if another franchisee somehow gets entangled in bad publicity. Like the proverbial “rotten apple”, it can damage the whole chain.
• Your franchisor may be out of sync with local market and force you to adopt policies that are counter-productive.
• Your franchisor may force you to buy products from designated suppliers at higher prices than the market-rate.
• Joining hands with certain franchisors can be damaging, as they may have restrictive non-compete clause, if you terminate or don’t wish to renew your franchise agreement.
• A high royalty fee may eat into your profit margin.





Pros and cons of franchise ownership - To learn more about this author, visit Michael Hemenway's Website.

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Anne Barr
Anne Barr has over 26 years experience in sales and marketing, six years as a franchisee. She has assisted over 367 business owners and purchasers to achieve their goals in career change, transition and exit strategy. She holds the designation of Certified Franchise Executive from the International Franchise Association, Certified Business Intermediary from the International Business Brokers Association and Board Certified Broker from the Texas Association of Business Brokers. Anne is active in professional organizations, networking groups and volunteers for non-profit entities. As owner/operator of four successful businesses, Anne has proven people skills and enjoys helping clients find the right "fit" in business ownership. Visit www.FranchiseOpportunitySpecialist.com for more information about me and my company. - Visit Anne Barr's Website

John Power
John Power, founder of Biltmore Franchise Consulting, has extensive experience developing and marketing franchises and business opportunities. He has been in and around franchising for over twenty years. From 1980 through 1990 he conceptualized, organized, and developed the American Video Association. He grew AVA to 2,000 national members, before selling the company it 1990. It was later merged into another home video marketing company. From 2000 to 2005 he worked as a contract marketing and human resources consultant to several local and national companies. In 2005 Mr. Power began working as a franchise development consultant on a full-time basis. Since that time he has helped more than three dozen companies initiate and develop their franchising program. He notes that there are many companies interested in developing a franchise program, and who need his specialized assistance. Mr. Power is a “hands-on” franchise consultant. He said, “I am the ‘nuts and bolts’ person who tends to the details for my clients.” Mr. Power holds a B.S. degree with a major in Marketing. See: www.biltmorefranchise.com You may contact Mr. Power at: jpower@biltmorefranchise.co - Visit John Power's Website

John Brennan
John Brennan Ed.D. Dr. Brennan is President of Interpersonal Development, LLC, a training and development firm. Interpersonal Development has provided sales training and coaching to more than 3,000 sales reps from over 100 companies. A native of Australia, Dr. Brennan received his doctorate from the University of Rochester. His dissertation researched the effectiveness of Behavioral Modeling Technology in training people in interpersonal skills. While he has spent most of his career designing or delivering training, he was also a Vice-President of Sales of a training and development franchise with operations in 25 markets. Dr. Brennan has designed and delivered sales training in North America, Asia, Europe, Australia and the Middle East. He has been a guest speaker at numerous national and regional professional conferences. When Microsoft wanted Best Practices articles on sales for their web site, they called Dr. Brennan. The results are at http://office.microsoft.com/en-us/FX011387391033.aspx His firm’s clients have included Volvo, The Prudential, Merrill Lynch, Eastman Kodak, Gannett, Equifax Europe, the Economist Group and countless small businesses. - Visit John Brennan's Website

Jay Kubassek
(Jay's Full Bio: EvanCarmichael.com/jaykubassek)  In five years, Canadian-born entrepreneur Jay Kubassek went from selling mufflers at a Midas franchise to revolutionizing Internet marketing with the 2004 launch of CarbonCopyPRO, a online marketing education company, now worth over $20 million with customers in over 160 countries.

 

As an independent film producer, his upstart film fund Aliquot Films is currently producing a films with Spike Lee and Abel Fererra (starring Ethan Hawke and Dennis Hopper.)

 

Jay's entrepreneurial spirit is irrepressible. He’s the owner of five companies, a professional speaker and trainer, international real estate developer/investor, extreme sport enthusiast and emerging philanthropist. 

 

Jay resides in NYC with his wife Jamie, son Milo and dog Cooper.  Visit Jay's official website: www.JayKubassek.com - Visit Jay Kubassek's Website


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About The Author


Michael Hemenway
(Visit Michael's Website) Founder/CEO of brandEXPANSION the only firm of its kind serving all aspects of franchising. With our industry background and successful franchise units established around the world, we have a time tested strategy to assist you in locating, developing, advertising, marketing and executing the optimal franchisor and franchisee strategy. brandEXPANSION brings over a dozen years of hands on experience in the field. This gives us an insider’s perspective on the business of franchising, which is an invaluable asset in supporting your objectives. We simplify the franchise experience by providing on going consulting and support designed to deliver the most profitable franchise investment you can attain. brandEXPANSION has placed franchise units in over 1000 locations nationwide. This includes the strategy and writing of franchise documents, over 600 franchise real estate locations selected, over 200 construction projects completed and over 250 proven franchise companies currently represented. The company also operates the leading franchise-industry social networking site, http://www.FranchiseUltraLounge.com .

Michael Hemenway is a Platinum author on EvanCarmichael.com
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