The Reality of Initial Fees in Determining Which Franchise to Choose
Often, when franchise buyers are interested in shopping for a franchise they will pick up a franchise directory of all the franchises listed, and they will start looking in the category in which they wish to participate, perhaps, it is in the industry that they have worked in for a number of years. That's all well and good, but something that strikes me when interviewing potential franchisees, is that too many of them are shopping on franchise fees alone.
In other words, they are looking at the franchise fee and they want to go with a company that has the lowest initial fee. This is a huge mistake, because every franchise is different and it's like comparing apples and oranges. One franchise company may have a large up front franchise fee, but it may have lower royalties, less startup cost, better training, and much more franchisee support; support that you are very much going to need once you start your business.
Often, newer franchisors will lower their franchise fee just under the amount of their larger franchise rivals. But you must also know that there is a five to one failure rate amongst new franchisors, meaning that your franchisor could go at a business and leave you holding the bag, and the only reason you bought from that particular franchising company was because they had a lower initial fee? Are you beginning to see the problem here?
There's a lot more that goes into buying a franchise than just comparing initial franchise fees. Normally the Franchise Disclosure Documents are over 250 pages long, filled it with detailed information about the purchase of the franchised outlet franchises are complicated investment, so you have to do your homework, take a lot of notes, and compare all those notes. Please consider all this.
Lance Winslow is a retired Founder of a Nationwide Franchise Chain, and now runs the Online Think Tank. Lance Winslow believes if you have diabetes you need to learn as much as you can; managing diabetes
Note: All of Lance Winslow's articles are written by him, not by Automated Software, any Computer Program, or Artificially Intelligent Software. None of his articles are outsourced, PLR Content or written by ghost writers. Lance Winslow believes those who use these strategies lack integrity and mislead the reader. Indeed, those who use such cheating tools, crutches, and tricks of the trade may even be breaking the law by misleading the consumer and misrepresenting themselves in online marketing, which he finds completely unacceptable.
Article Source: http://EzineArticles.com/?expert=Lance_Winslow
How Much Money Can You Make in a Franchise - Some Franchisors Will Tell You
The matter of earnings claims in franchising has been one of the most litigated issues in the industry. The reason is some franchisors do not give earnings claims, because they realize that it's really hard to tell how much one of their franchised individual outlets will make, and if they give a rough estimate or average of the sales receipts of their other units, they realize it's no guarantee.
It serves as a general guideline and an average, but you must also understand that the average human has one boob. So you can see the problem with statistics and averages.
Further, just because a franchisor gives earnings claims in their Franchise Disclosure Documents does not mean that the franchisee is going to make that kind of money without putting in hard work, lots of hours, and they will have to follow the franchisor's procedures, and the information in the confidential operations manual explicitly. Still, there is no guarantee; there are so many other factors.
For instance, an economic recession could come along, and none of the franchisees will make the earnings claims that were put forth the FDD or Franchise Disclosure Documents, or an individual franchisee might find themselves in the midst of a price war with a local competitor. Then there are issues with the franchisee himself, perhaps he lacks the business acumen, management skills, ability to delegate, the skill to motivate, or he is clearly undercapitalized and lacks the working capital he needs to really succeed.
Indeed, I find it odd that franchisees will look at earnings claims then take the franchise fee and the total initial investment and calculate a return on investment, and then make your choices from that. It's important to know this information and it's wonderful that many franchisors have worked so hard to give the best possible earnings claims figures, in the most accurate way.
But in the end they don't mean anything really. That is my opinion others in the franchising industry have theirs, as do the regulators. Please consider all this.
Lance Winslow is a retired Founder of a Nationwide Franchise Chain, and now runs the Online Think Tank. Lance Winslow believes if you have diabetes you will need information to maintain your health; controlling diabetes
Note: All of Lance Winslow's articles are written by him, not by Automated Software, any Computer Program, or Artificially Intelligent Software. None of his articles are outsourced, PLR Content or written by ghost writers. Lance Winslow believes those who use these strategies lack integrity and mislead the reader. Indeed, those who use such cheating tools, crutches, and tricks of the trade may even be breaking the law by misleading the consumer and misrepresenting themselves in online marketing, which he finds completely unacceptable.
Interview With a Prospective Franchisee
Name: Carina Mäkelä
Professional background: Research & Marketing (private and NFP sector).
This is an interview with a lady who has done her homework in investigating the opportunity that franchising will provide her in starting up her own business. She won a free copy of my e-book in the competition I ran last month.
1. What is your career position at the moment?
"I am currently in the process of finishing a due diligence process with a franchiser I have chosen, after three months research into franchises and some very hard thinking! I now need to finish my Business Plan, get feedback from the franchiser as well as a professional business adviser. I've already secured an accountant, have short-listed my solicitors and talked to a franchise manager at a bank. My hope is to get started as soon as possible!"
2. What steps have you gone through in your decision making to want to buy a franchise or become self-employed?
As a first step I went to a number of Franchise Expos, attended loads of workshops to get a really good, realistic view of franchise and talked to a lot of franchisers at the show.
I then contacted a service that matches a candidate with the correct franchise according to the candidate's preferences - all for free! This service gave me a good indication of the types of franchise to go for i.e. which ones match my skill set and business expectations in terms of financial aspect and job satisfaction.
Thirdly, as I have never run my own business before, I attended a number of enterprise/start-up courses and workshops, of which Shelley's was one of the most informative ones as it kept on going even after the workshop had ended! Knowing somebody in the field who is able to provide professional advice on a personal level is so very valuable!
Finally, I did some research into realistic demands of running your own business and, most importantly, whether I had all it takes! You have to be extremely honest with yourself during this process as having a dream of being your own boss and actually coping with the loneliness and insecurity of running your own business, and therefore not having a security of a regular salary, may cause some stress! On the other hand, setting up your own start-up business and setting up a franchise with a support network in place are two very different things!
3. Which tools/resources did you find most helpful?
The most important stages in my process have been looking at my own capabilities; equipping myself with appropriate knowledge by attending the right type of courses and workshops where you have access to real life experience and knowledge; as well as accessing franchise directories which you can use as a first step to start narrowing down your options.
There is a vast amount of literature available regarding franchising, some of which is free e.g. Which Franchise, Business Link and various banks' franchise leaflets. They offer great advice on the type of information you want to draw from the franchiser, what to expect and how to go about making your dream real e.g. getting the financing in place, legal requirements, etc.
4. What advice would you give anyone else who may only be starting their journey of 'self-employment' discovery?
You can start by doing a SWOT analysis on yourself, really understanding your skill set and how it can work for you. Also, be honest with yourself about what you like and dislike - this will save you loads of time later. Start your research, be open and don't necessarily rule out franchises because they don't sound sexy enough - they can still provide excellent return on investment, provided you're willing to work hard and follow the business model right down to the letter!
Do your research: franchise (brand image, industry?); franchiser (do you get on, is he supporting you on his own?); business model; your competition; your area; etc. Talk to as many in the field as possible and attend as many events as you can - you never know what's around the corner! And don't get scared - you are not alone doing this! You can always get useful advice and support - that's the best bit!
http://www.expertfranchiseguide.com Get Shelley's FREE report that outlines 'The 7 Critical Realities You Need to Know Before You Buy a Franchise' by clicking here and going to 'Want to Start a Business?'
Article Source: http://EzineArticles.com/?expert=Shelley_Pearson
Often, when franchise buyers are interested in shopping for a franchise they will pick up a franchise directory of all the franchises listed, and they will start looking in the category in which they wish to participate, perhaps, it is in the industry that they have worked in for a number of years. That's all well and good, but something that strikes me when interviewing potential franchisees, is that too many of them are shopping on franchise fees alone.
In other words, they are looking at the franchise fee and they want to go with a company that has the lowest initial fee. This is a huge mistake, because every franchise is different and it's like comparing apples and oranges. One franchise company may have a large up front franchise fee, but it may have lower royalties, less startup cost, better training, and much more franchisee support; support that you are very much going to need once you start your business.
Often, newer franchisors will lower their franchise fee just under the amount of their larger franchise rivals. But you must also know that there is a five to one failure rate amongst new franchisors, meaning that your franchisor could go at a business and leave you holding the bag, and the only reason you bought from that particular franchising company was because they had a lower initial fee? Are you beginning to see the problem here?
There's a lot more that goes into buying a franchise than just comparing initial franchise fees. Normally the Franchise Disclosure Documents are over 250 pages long, filled it with detailed information about the purchase of the franchised outlet franchises are complicated investment, so you have to do your homework, take a lot of notes, and compare all those notes. Please consider all this.
Lance Winslow is a retired Founder of a Nationwide Franchise Chain, and now runs the Online Think Tank. Lance Winslow believes if you have diabetes you need to learn as much as you can; managing diabetes
Note: All of Lance Winslow's articles are written by him, not by Automated Software, any Computer Program, or Artificially Intelligent Software. None of his articles are outsourced, PLR Content or written by ghost writers. Lance Winslow believes those who use these strategies lack integrity and mislead the reader. Indeed, those who use such cheating tools, crutches, and tricks of the trade may even be breaking the law by misleading the consumer and misrepresenting themselves in online marketing, which he finds completely unacceptable.
Article Source: http://EzineArticles.com/?expert=Lance_Winslow
How Much Money Can You Make in a Franchise - Some Franchisors Will Tell You
The matter of earnings claims in franchising has been one of the most litigated issues in the industry. The reason is some franchisors do not give earnings claims, because they realize that it's really hard to tell how much one of their franchised individual outlets will make, and if they give a rough estimate or average of the sales receipts of their other units, they realize it's no guarantee.
It serves as a general guideline and an average, but you must also understand that the average human has one boob. So you can see the problem with statistics and averages.
Further, just because a franchisor gives earnings claims in their Franchise Disclosure Documents does not mean that the franchisee is going to make that kind of money without putting in hard work, lots of hours, and they will have to follow the franchisor's procedures, and the information in the confidential operations manual explicitly. Still, there is no guarantee; there are so many other factors.
For instance, an economic recession could come along, and none of the franchisees will make the earnings claims that were put forth the FDD or Franchise Disclosure Documents, or an individual franchisee might find themselves in the midst of a price war with a local competitor. Then there are issues with the franchisee himself, perhaps he lacks the business acumen, management skills, ability to delegate, the skill to motivate, or he is clearly undercapitalized and lacks the working capital he needs to really succeed.
Indeed, I find it odd that franchisees will look at earnings claims then take the franchise fee and the total initial investment and calculate a return on investment, and then make your choices from that. It's important to know this information and it's wonderful that many franchisors have worked so hard to give the best possible earnings claims figures, in the most accurate way.
But in the end they don't mean anything really. That is my opinion others in the franchising industry have theirs, as do the regulators. Please consider all this.
Lance Winslow is a retired Founder of a Nationwide Franchise Chain, and now runs the Online Think Tank. Lance Winslow believes if you have diabetes you will need information to maintain your health; controlling diabetes
Note: All of Lance Winslow's articles are written by him, not by Automated Software, any Computer Program, or Artificially Intelligent Software. None of his articles are outsourced, PLR Content or written by ghost writers. Lance Winslow believes those who use these strategies lack integrity and mislead the reader. Indeed, those who use such cheating tools, crutches, and tricks of the trade may even be breaking the law by misleading the consumer and misrepresenting themselves in online marketing, which he finds completely unacceptable.
Interview With a Prospective Franchisee
Name: Carina Mäkelä
Professional background: Research & Marketing (private and NFP sector).
This is an interview with a lady who has done her homework in investigating the opportunity that franchising will provide her in starting up her own business. She won a free copy of my e-book in the competition I ran last month.
1. What is your career position at the moment?
"I am currently in the process of finishing a due diligence process with a franchiser I have chosen, after three months research into franchises and some very hard thinking! I now need to finish my Business Plan, get feedback from the franchiser as well as a professional business adviser. I've already secured an accountant, have short-listed my solicitors and talked to a franchise manager at a bank. My hope is to get started as soon as possible!"
2. What steps have you gone through in your decision making to want to buy a franchise or become self-employed?
As a first step I went to a number of Franchise Expos, attended loads of workshops to get a really good, realistic view of franchise and talked to a lot of franchisers at the show.
I then contacted a service that matches a candidate with the correct franchise according to the candidate's preferences - all for free! This service gave me a good indication of the types of franchise to go for i.e. which ones match my skill set and business expectations in terms of financial aspect and job satisfaction.
Thirdly, as I have never run my own business before, I attended a number of enterprise/start-up courses and workshops, of which Shelley's was one of the most informative ones as it kept on going even after the workshop had ended! Knowing somebody in the field who is able to provide professional advice on a personal level is so very valuable!
Finally, I did some research into realistic demands of running your own business and, most importantly, whether I had all it takes! You have to be extremely honest with yourself during this process as having a dream of being your own boss and actually coping with the loneliness and insecurity of running your own business, and therefore not having a security of a regular salary, may cause some stress! On the other hand, setting up your own start-up business and setting up a franchise with a support network in place are two very different things!
3. Which tools/resources did you find most helpful?
The most important stages in my process have been looking at my own capabilities; equipping myself with appropriate knowledge by attending the right type of courses and workshops where you have access to real life experience and knowledge; as well as accessing franchise directories which you can use as a first step to start narrowing down your options.
There is a vast amount of literature available regarding franchising, some of which is free e.g. Which Franchise, Business Link and various banks' franchise leaflets. They offer great advice on the type of information you want to draw from the franchiser, what to expect and how to go about making your dream real e.g. getting the financing in place, legal requirements, etc.
4. What advice would you give anyone else who may only be starting their journey of 'self-employment' discovery?
You can start by doing a SWOT analysis on yourself, really understanding your skill set and how it can work for you. Also, be honest with yourself about what you like and dislike - this will save you loads of time later. Start your research, be open and don't necessarily rule out franchises because they don't sound sexy enough - they can still provide excellent return on investment, provided you're willing to work hard and follow the business model right down to the letter!
Do your research: franchise (brand image, industry?); franchiser (do you get on, is he supporting you on his own?); business model; your competition; your area; etc. Talk to as many in the field as possible and attend as many events as you can - you never know what's around the corner! And don't get scared - you are not alone doing this! You can always get useful advice and support - that's the best bit!
http://www.expertfranchiseguide.com Get Shelley's FREE report that outlines 'The 7 Critical Realities You Need to Know Before You Buy a Franchise' by clicking here and going to 'Want to Start a Business?'
Article Source: http://EzineArticles.com/?expert=Shelley_Pearson
