Starting A Franchise

Once you have mastered these tasks, you may reach the point where you would like to expand your current business. You can always hire additional employees, market more aggressively or expand your current product line.

However, there is another very viable alternative you should definitely consider - franchising your business! I'm going to discuss some of the important elements of franchising to help you decide if this is the right route for you.

The decision to start a franchise should not be taken lightly, but it can prove to be very financially and emotionally rewarding. I'm going to discuss some of the steps you should consider to ensure your franchise succeeds.

Before you begin, you need to understand the meaning of the word franchise. The term signifies a legal arrangement in which one party called the franchisor grants the rights to market products or services using the trademark of their business to an individual or group of people called the franchisee.

The franchisee can then market the products or services using the methods specified by the franchiser. In return, the franchisee must pay the franchiser specified royalties and fees to use these rights.

Rather than an actual business or industry, franchising is a method businesses use to market and distribute their products or services. Both parties share an interest in ensuring the company succeeds.

Another step before you actually decide to franchise your business is to list all the advantages. Consider that you will be able to expand much more quickly and less expensively by franchising.

Another advantage is the fact that the more franchises that exist, the greater your purchasing power. If you are considering purchase a franchise, you can fulfil your dream of becoming self-employed and start running your business more quickly.

As a franchisee, you will normally gain valuable ongoing support, training and advice from the franchiser. Raising finance to purchase a franchise is also much easier than raising the money to start your own business.

Like any business venture, starting a franchise has its disadvantages. As a franchiser, you will lose a significant amount of control over your business. As a franchisee, you will lose creative freedom as you need to follow the requirements established by the franchise owner. You also have to pay a certain percentage of your profits to the franchiser.

You need to investigate the particular requirements to start a franchise in your country. The legal requirements vary greatly, depending on where you live. For example, the British Franchise Association requires that all franchisers possess at least one year of experience running a business before they can franchise.

If you are a franchisee, you should consider a pilot operation that has an audited set of accounts. This makes it easier to evaluate if the business is going to be profitable.

At the beginning of the franchise agreement, the franchisee will obtain a package outlining all the intellectual property rights. It's important to ensure that the franchiser's rights are protected. The intellectual property may consist of a trademark, patent, registered design or copyright. The franchise agreement will specify exactly which licenses will be awarded to the franchisee and how they can be used.

If you are planning to start a franchise, you need to obtain a detailed operating manual. This document will outline the essential information the franchiser has gathered while operating the pilot scheme.

The manual will disclose any relevant information necessary to run the franchise successfully, including sales, reporting, equipment, marketing and accounting requirements. This document contains valuable information about the business. Hence, the franchise agreement will normally specify that the contents remain confidential and are never shared with any third parties.

You need to determine if the franchise you are planning to start is mobile or property-based. Some franchises may be run from your own home, whereas others are operated with customised vans. The location of the business may be crucial in the development of the franchise network. Hence, the franchiser may choose to retain control of the premises.

If you are considering offering franchises, you have to prepare a franchise agreement. This document will permit the franchisee to run the business according to the specified legal obligation and intellectual property rights. The agreement must meet local law requirements, and it should protect the franchiser and present a workable document to the franchisee.

Before starting a franchise, you need to determine the fees involved. As a franchisee, you will be required to pay an initial fee to the franchiser for the privilege of joining the franchise network. Franchisees may also pay management fees, although they are sometimes included in the wholesale price of the product. Lastly, the franchiser usually receives ongoing royalty fees that represent a specified percentage of the profits.

As a franchiser, you are obligated to provide support, training, a detailed operating manual and a franchise agreement to the franchisee. You also agree to promote the brand and to avoid competing by not granting other franchises in the same area.

As a franchisee, you must run the franchise business according to the guidelines established in the manual and the rights specified in the franchise agreement. You are responsible for keeping proper records, obtaining insurance, ensuring confidentiality, complying with intellectual property rights and maintaining the franchise premises.

Be Business Smart has been created to assist anyone who is setting up a new company and to offer valuable support and advice to individuals who wish to expand their current business.

Did you realise that approximately 80% of new businesses fail each year? You certainly don't want to become one of those statistics. Fortunately, Be Business Smart can provide you with the help and support you need to ensure your business becomes a success!

Be Business Smart offers two levels of membership to suit your business budget. Here at Be Business Smart, we have a lot to offer any new business, but please don't take our word for it. We encourage you to browse our website and see for yourself. http://www.bebusinesssmart.com

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You started your own business. You put in the twenty hour days to get it off the ground because you believed in it, and you knew it could work. Now you have a very successful business.

You are making money based on a sound idea and a high level of customer service. Now you see your business in every shopping mall and on every street corner in America. You are ready to franchise your business. Where do you start?

First of all, what exactly is a franchise? A franchise is a network of interdependent businesses that have a relationship that allows a number of people to share three basic things. First of all they share brand identification.

They are all selling the same product in the same manner. Second, they are sharing a business model with a proven track record for success. Finally, they all share a common distribution and marketing system that allows them to do business extremely efficiently. The common goal is to grab a large chunk of the market share and gain more customers than one's competitors.

When you own a business and you franchise it, you are selling the right for others to use your brand name. People are investing their money into your brand name to utilize your operating system and to use your ongoing support.

There are obviously many advantages to buying a franchise, and you will undoubtedly use these to sell your business model to others. The people buying your franchise will find comfort in the fact that there are other people facing the exact same problems everyday. This network will allow people to deal with the daily challenges together.

There are obviously things to be aware of when franchising your business. If you sell a franchise to an individual, and that individual fails, this will hurt the entire group. This is why many companies set the bar very high when selling a franchise.

There are four basic things you will need to have in place and possess before you can think about franchising your business. Let's go through each one so you have an idea about the plan you will need to have in place.

First of all, you will be required by the Federal Trade Commission to prepare a standard disclosure document for your franchise. This document is called Uniform Franchise Offering Circular (UFOC) is required by all companies. In addition to this, there are many states that have their own requirements. Make sure that you look into the laws pertaining to the state you plan to franchise in.

Second, you will be required to prepare an audited financial statement for the franchise company. This is actually one of the requirements under the legal section we mentioned above.

You won't be able to complete any of the legal requirements until you have first completed the financial statement. You will need an experienced account that is familiar with franchise accounting. This person will advise you on the financial structure of your enterprise.

Third, you will need to create and meticulously document your franchise system. This is the guideline you will use to make sure that your franchises run in the manner that you have set up. All of the franchises will run in the exact same manner.

This document will teach each person to run their franchise in the same way that made your initial business successful. You will also need to formulize your marketing plan that will drive new customers to the new business units. You will also need to formulize and utilize a sales system that will help you sell your franchise.

Finally, you will need to have the right mindset to run a franchise. In your current business, you have employees that probably do as they are told with little resistance. This will not be the case with your franchise.

You will have to be careful not to treat your franchisers as employees. Use the power of persuasion to try and get people to do what you want. The most successful franchisers treat the people that purchase their franchises as partners rather than employees. This persuasion method may take longer to achieve results, but in the long run everyone associated with your company will be happier.

Franchising is obviously a great way to expand your business. Make sure that you have done all the planning and understand the legal requirements for your particular state. Do as much research as possible and make sure that you have all the bases covered before you make your first sale. For more information, please visit Starting A Franchise.

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Starting a franchise is a sure fire way into self employment without all the usual hassles of creating the business plan and venturing into un chartered waters with a new start-up business. The advantages over a stand alone business are evident and we have made a list to discuss the merits of starting a franchise as opposed to setting up as an independent.

1. Tried and tested business model - When you are starting a franchise you are following a system set up by the franchisor and tried and tested in multiple locations up and down the country. Many young businesses are testing new markets and can often fail due to the lack of proper research or bad implementation of the business model however when starting a franchise you will be following the tried and tested methods of the franchisor and the current franchisee base, taking away the element of risk involved with all business start ups.

2. Head Office Support - When starting an independent business you have to rely on yourself and possibly your partner for advice and support. This is a heavy burden and makes the viability of the business 100% your responsibility. All problems must be solved by you and your team alone and in many cases these might be fresh problems that you have no experience of dealing with. when starting a franchise you will have a constant line of support open for advice and problem solving and this advice comes free, giving you all the help needed to overcome any obstacles and ensure you make a success of your newly bought franchise business.

3. Local and national marketing - Marketing is not cheap, especially national marketing. In most cases a franchisor will be taking a small % of profits from all it's franchisees and putting this towards national marketing campaigns. With this pool of money they can easily afford television campaigns and national media publications in the magazines and newspapers, giving your and your business a huge boost in brand awareness that you would otherwise not be able to afford with your own independent start up.

1. Lack of control - Starting a franchise, although similar to owning your own business, is not quite the same. You are under strict instructions from the franchisor on how to operate your business and options for expansion of the business model can in most cases by limited. You are bound by the agreements and operations manual and in most cases it is a very good idea to stick to the rules and instructions set down there.

You are starting a franchise because you want to buy into the successful business model so why change it? However, there are sometimes occasions where a business model may not be working due to either your market area of economic climate, or you may see new opportunities which may be profitable to change the franchise system to your advantage and this may well not be allowed if you franchisor does not allow you too.

2. Monthly licence fees - Many franchisors, if not most franchisors, take either a set monthly fee from you or a % of profits. This is often split up into several areas. 1. Monthly licence fee. 2 Contribution towards national marketing. 3. Rental of equipment or premises.

Often these are not static numbers but a % of turnover so you may find that where 1 franchisee is paying £100 per month for their marketing contribution, your 5% of profits is £300 per month. It is all dependent of what is laid down in the franchise agreement and you need to be aware of this.

3. Buying and renting of equipment and stock - You may think you can cut costs by finding cheaper suppliers but a lot of franchisors will only allow you to purchase and rent stock and equipment direct from their named suppliers. Often the franchisor makes a little money on this and it may seem unfair that you cannot utalise your skills in locating your own products cheaper elsehwere.

However do remember that they will have strict quality controls in place to ensure that not only is the equipment and stock of good quality but that they are consistent across all franchisee's, ensuring brand continuity.

There are of course many other advantages and disadvantages over buying a franchise and you have to take everything into consideration before going ahead with your purchase. ensuring that you have weighed up everything that starting a franchise offers over starting your own independent business. ensuring that you have all bases covered you should be able to make your decisions with confidence and the outcome is the right decision for you.

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If you are looking at starting a franchise then you need do be doing some good research to identify your own skills, goals and the choices on offer. By following these helpful tips you can start narrowing down a selection of franchises which are not only suited to your abilities and interests but also are viable opportunities to buy into.

1. First identify your skill base and interest. It is now time to have a think about which franchise sector you want to buy into and a good starting point is to ensure that you are buying a franchise which is likely to be one you enjoy running to a certain extent.

If you are an avid sportsman or women then maybe a sports franchise is the right choice, perhaps if you enjoy looking after children then a children's based franchise should be more your area and if you have a history of business management or training then again these are the areas you aught to be looking into starting a franchise with.

It is of course not always necessary to have an existing hobby and there are many franchises out there such as food based franchise which may hold your interest too however having a good think about the area of franchising you want to buy into is a good start.

2. Armed with your personal preferences the next step is to start selecting a list of franchise opportunities which are available in your area to buy. Google "franchise directories" and start browsing through one of the many sites out there with comprehensive franchise lists. From these you can usually order free franchise information packs and the best way to go now is to order ten or so which look to be of interest to you.

3. You have your franchise packs and now it is time to short list several to begin investigating. Read all the packs well and discard any not of interest, try and leave yourself 3 to 5 packs to really get researching.

4. Research! Go on line and and dig up what you can about each franchise, look for bad reviews and good reviews. Any with too many bad reviews discard and keep to hand the remaining selection

5. Contacting the franchiser. It's now time to contact each franchiser and request a meeting take place. At these meetings ask for a list of current franchisees and find out a little about the history of the franchise.

Armed with this information you can then contact a random sample of current franchisees from each and find out how well they are performing with their franchise, any that do not appear up to scratch or are not meeting the promises made in their promotional materials you can discard.

6. decision time - Look over all your research and make your final selection from what is left. This may be a difficult choice and it may simply come down to personal preference but when starting a franchise you need to have an interest in it also so if there is one that stands out and stands up to scrutiny then grasp it!

With the right research you can be starting a franchise in no time at all. Good luck!

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TELEVISION hits such as The Apprentice and Dragon's Den are compelling because of their insight into the cut-and-thrust world of business.

Entrepreneurs who are looking for a less gruelling route to success should consider franchising.

This boom sector of British industry offers readymade solutions to the uncertainties of business. The big attraction is that you start up as part of an already established company, meaning you need less capital and can hit the ground running. Usually, the company or brand is a known name, and you get ongoing training.

This removes a lot of the risk and increases your chances of not just surviving, but prospering. The formula speaks for itself: about 90 per cent of franchise businesses are profitable within five years, when many other start-ups fail. Another bonus is that you do not need to have a business track record to prove yourself.

There is a vast choice of franchise opportunities - from management consultancy to computing, from retailing to recruitment. More than 200 companies will be exhibiting at the British and International Franchise-Exhibition taking place at Olympia on 24 and 25 March. All are seeking to expand in the UK, and there are global businesses too.

Visitors to the exhibition also get the chance to meet and learn from inspirational businessmen such as Bobby Hashemi, cofounder of the Coffee Republic chain, who will be conducting seminars.

With a franchise, you are given a licence to trade by the franchisor. You will need to put some money up front - anything from Pounds 5,000 upwards.

Often there is a service fee - perhaps eight per cent of gross income - and sometimes an advertising levy.

Franchisors also make money out of the mark-up on goods supplied.

After 15 years as a City broker, Tony Goreham started a new career as franchisee for Mixamate, which supplies concrete and flooring screed products to the building trade.

"Instantly, I saw the potential and realised it was too good an opportunity to miss, " he said. "What appealed most was being my own boss but under the umbrella of a big company. It's been a steep learning curve because I knew nothing about franchising or concrete, but it is hugely rewarding."

Franchisors say the ideal person is someone with ambition and enthusiasm, but not necessarily experience or knowledge of the sector chosen.

Indeed, franchisors often avoid people who have been in the same line of business before, believing you can't teach an old dog new tricks.

However, do not be fooled into thinking it is an easy way to make money.

You have to be the right type. Though franchisees are self- employed, they operate within a framework laid down by someone else - the franchisor - who exercises control to ensure the business is not devalued.

Choosing a cleaning franchise venture is often much more difficult than investing in a conventional franchise opportunity. Check for the UFOC (Uniform Franchise Circular Offering) and go through every minor detail that might be useful to you or is in your interest. After you have gone through all this, you are ready to take your initial steps into the world of cleaning franchise business with robust confidence.

As always, if you are looking at starting a franchise you should do your due diligence. Although most franchise companies are very respectable and offer good opportunities, there can be the occasional rouge franchise that is simply trying to gain your franchise fee and offers little in the way of a functioning business. The is your hard earned money and this is not a job interview so doing the proper research into each and every opportunity you look at is essential.

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