Business Franchising - Just What Should You Look For In A Franchise?

What is a Franchise?business.
· An authorization to sell a company's goods orQuicker Start-Up than Independents
services in a particular placeA proven plan out-paces an independent's hit &
· A business established or operated under anmisses operation almost every time. Looking at just
authorization to sell or distribute a company's goodsindependents that succeed--you'll find that franchises
or services in a particular area.grow quicker, reach break-even sooner and succeed
How did franchising start?more regularly than others in the same industry as
One of the earliest franchisors was the Singerdepicted in the accompanying chart
Sewing Machine(R) Company, which set up dealersWhat do I need to know?
shortly after the Civil War to sell and repair itsAnother question that arises is "What do I need to
revolutionary machines throughout the country.know in building my own franchise?" There are four
Shortly after the turn of the century, Coca-Cola(R)main ingredients found in each business...
licensed others to manufacture and distribute its· The product or service that is delivered to its
wonderful elixir. Ford Motor Company(R) later set upcustomers.
dealers to sell and service its products. Of course,· The location that the business occupies.
McDonald's(R) is an example of how an entrepreneur· The amount of capital that was invested or
(Ray Kroc) could take an idea and quickly spread itborrowed by the venture.
coast to coast (and eventually around the world)· The management team that runs the company
without starting out with millions of dollars in capital.-You!
Many companies turn to franchising as a system forMaking a choice
expansion because they recognize that they canChoosing the right franchise can be a confusing
grow rapidly with a minimum amount of capital andprocess.
enlist top-notch partners if the company is willing toFirst, you must believe in the product or service that
share the profits. The company that sells licenses tothe franchise network delivers. Is the niche stable,
its system is called the franchisor, while those whoexpanding, long-term, saturated?
open their own units are called franchisees.Next, you must verify the industry's future. What do
Why franchise?the trade papers predict?
There are many reasons why franchising is the bestCheck your aptitude for the job. If you don't enjoy
type of operation for the majority of first-timemath, an accounting franchise isn't for you, etc.
business owners. Most revolve around the increasedOften outside sources can help here. A personality
probability that the business will succeed and provideand aptitude test (similar to those used by major
profits to the owner in a shorter time frame than ancorporations) will help you discover your hidden
independent business. This allows the owner totalents.
address her or his personal goals both financially andDetermine the earnings capability. Most franchisors
personally. Here are a few, more detailed, answers tocan't provide earnings projections, but you must
that question.make an effort to determine your future return.
Earn what you're worthConfirm the potential earnings and the franchisor's
Thousands of franchise owners report they wereintegrity with existing franchisees. Each franchisor will
handicapped in their corporate careers by companygive you a list of its network members.
policies and supervisors that put a cap on theirYou should call them to get their confirmation of
earnings. When you own your own company, youryour projections. If a franchisor (or business
efforts are rewarded and your personal incomeopportunity seller) will not give you a list of its
shows it!franchisees, you should heed the red flashing lights
Satisfaction of Achievementand end discussions.
Many business owners report that seeing theirWhile this article is just the tip of the iceberg, you
actions turned into reality without stagnating forcan get a good idea why you should start your own
months in committee meetings (as often happens infranchise, today.
big companies) is a major reward of owning their