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