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Franchise Start-up: Engage Professionals to Eliminate Costly Mistakes

Written by: Naren

Article Overview: In a challenging business environment where competition is extremely high and too many players fighting for the customer’s dollar, it is not so easy to succeed with a new start-up.

Franchise Start-up: Engage Professionals to Eliminate Costly Mistakes

In a challenging business environment where competition is extremely high and too many players fighting for the customer’s dollar, it is not so easy to succeed with a new start-up. In the business world, the law of the jungle still holds true as ever – survival of the fittest. There are no second chances, and there is no room for costly mistakes. The investments once made are usually irreversible therefore the decision-making process must be extremely cautious for a start-up, and due diligence must be exercised at every stage.

Depending upon the scale of your business investments, it is important to hire professional help to guide you through the whole business process. A “penny wise pound foolish” approach can lead to disaster in starting any new business. Especially in case of a franchise business, there are countless instances where the gullible entrepreneurs get trapped by one-sided franchise agreements that unfairly favor the franchisor. Therefore, if you start off on a wrong footing, the consequences will have to be borne later on.

The following professionals can be your key to ensuring that your new start-up is going in the right direction:

Franchise Consultant: This can be an individual or a company that works as a broker or middleman between franchisors and the potential franchisees. They will charge their commission usually from the franchisors, and will provide you with valuable information about the various franchise options available in the market. They can widen your horizons by informing you about several new and promising franchisors that are coming up with attractive offers and opportunities.

Franchise Solicitor: Once you have zeroed in on the right franchise opportunity, it may be critical to hire the services of a professional franchise specialist lawyer who can review and negotiate the terms of the franchise agreement between you and the franchisor. He can ensure that you do not trapped by any misleading or tricky conditions hidden in the fine print of the agreement. Furthermore, this lawyer can also ensure that your franchise business fulfills all legal formalities and obligations that may be necessary to start the business.

Financial Consultant: If you are looking to raise funds through loans or other debt instruments, this individual or company can guide you to the cheapest sources of funds and give you valuable investment advice that can save you enormously in terms of costs of finance in the long run.

Accountant and Tax Specialist: A good accountant and a good tax expert can make sure that you avail of all the tax benefits to the maximum and fulfill all accounting requirements efficiently. A good cost accountant can also help you to eliminate wastages in your operations and save you substantial amount of money in the long run.

The new start-up must remember that hiring professional help is expensive, and judiciousness must be exercised in its usage. Ultimately, it is the entrepreneur that is the best judge of his situation and must apply his own critical evaluation for the kind of professional assistance that may be profitable for the business.

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Article Tags: business environment, business investments, costly mistakes, due diligence, footing, franchise agreement, franchise agreements, franchise business, franchise consultant, franchise opportunity, franchise options, franchisees, franchisor, franchisors, going in the right direction, law of the jungle, middleman, professional franchise, second chances, specialist lawyer



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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.
Re: The 3 Factors That are Limiting Your Productivity - Eliminate... automate... delegate... Good stuff. Another video for my blog!
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.


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