Planning to get associated as a franchisee to operate your own business? Buying a franchise is not at all an easy lottery of a sure business success. First, it is tough to get through binding with a established organization and later on to sustain finding the way out with various conflicts which arises between a franchise and a franchisee. To get hold of some background information to acquire some knowledge before digging in your pocket, just read through
Franchise what the term suggests?
Franchises are an authorised granted by a company to carry out business activities within the banner of the company. To get linked up under the trademark, working on the marketing guidelines, product innovations and techniques, operation procedures in lieu of a franchise fee. On top of it sometimes additional investment towards royalty or a percentage of the gross sales or on the profits to be borne by a franchisee.
Why at all step into those shoes?
The Franchise is all about coupling with a well established brand with a good percentage of market share. The assistance drives also in the form of selection of site of the project, negotiating with landowners for sale or lease agreements, setting up the infrastructure and so forth. The operations support in forms of training, managing day to day activities. Marketing the product within the prospective of a single branded umbrella provides that extra mileage for a better sales figure working with an already established brand.
Knowing it inside out
The system of the franchise business model maybe in terms of business format structure , the most common circumstances of an agreement between both parties where the franchisee can utilize the intellectual know-hows of the entire business. There may be instances like product franchising in which a particular product is only authorized to be sold. Franchising may also come with sharing only the technical knowledge or formulae in the course of manufacturing a product.
While even before penning into a franchise agreement, always do your homework of getting knowledge of the lucrative prospects of that particular industry,the demand of the product or services of the franchiser, the entire business functioning and the in depth future plan mapping towards success. Be clear about the territory you are scheduled to get authorized after the signed pact.
The cost factor
The entire initiative engages lots of funds as fees towards using the brand name. The amount of investment purely proportionate with a lot of factors like business types, competition, territory of the engagement, etc. Moreover, a continuous percentage fee has to be tackled on a regular basis that adds to the cost.
Don’t growl afterwards
A franchisee sometimes has certain restriction, like strictly follow the rules and regulation laid down as per the agreement. There hands are bound towards territory expansion, less control of operations and so on. Again a franchisee has to bear an ongoing expense as fees.