Franchising TNT

Copyright 2006 Peter Hayes

Franchise business opportunities are expanding rapidly. If you look at the most famous franchise in existence today is the McDonalds corporation. McDonalds has established itself around the world and is one of the leading business organizations. Opportunities in franchising continue to develop as the franchise industry develops.

What is a franchise?

Information on the Franchise Business

A franchise is a mirror image of an original business idea. When a business has become successful the opportunity arises to duplicate the success in other locations. When an individual purchases a franchise opportunity, they are purchasing is the right to repeat the original business operations in another area. To help them achieve success a franchisee receives complete instructions on how to achieve the success achieved by the original business. They get an established and proven business plan and marketing plan on which to build their new business.

A franchise has been granted the authorization to sell or distribute a companys goods or services in a certain geographical area. For example, a restaurant or coffee shops marketing area is limited, usually to people in the immediate local area. Therefore, creating another restaurant or coffee house based on the original business in a different area would be considered a franchise.

The original business developer determines the formula for producing the same result achieved by the original business and how this formula can be repeated in new locations. This formula is packaged and sold as a franchise. This package is sold to interested parties who can achieve success simply by following the proven formula.

Why Do Businesses Sell Franchises rather than Expanding their own Business?

What is the advantage of developing a franchise as opposed to simply opening the business in multiple locations? It is quite possible to open a number of restaurants in one city or county or even within a state. However, the time requirements and energy required to do this is extensive. Franchising offers th possibility to expand the business and have others on board to share the burden.

It would be impossible for someone like Roy Croc, who developed McDonalds, to run each individual McDonalds restaurant around the world. To expand your business without running it into the ground, you need quality people who have an interest at your own bottom line.

Information on Buying a Franchise Business

Many people would like the freedom to start their own business. However, they may be new to the business world. Or they may not be confident of their ability to develop a business. Or they may not have a business idea that they are confident in.

The opportunity to start a business that has a proven success record and an established plan for achieving a similar success is what make franchising attractive to new business owners.

This is beneficial to both the original business developer and the entrepreneur. The business developer makes a profit by selling his system and the entrepreneur gains the knowledge from an experienced owner with a successful business. This increases the opportunities for the entrepreneur, which allows for a greater chance of success.

Franchising consultants are the medium between franchisee and the franchisors. They act as the link between these two entities. By transferring the rights to other investors to use your business name, model and replicate the same in their own outlet, franchising enables the growth of the business.

Without having to worry about coming up with your own business model, having a franchise is a great way to start a business. You have the convenience of having an established and recognized brand to develop when you have a franchise, plus the support of a head office that will help you succeed. To pick one of the best franchises to own so you can have a business that is sure to succeed is the key to your success.

The entry of franchise consultants in the market has been mainly influenced by increased profitability in franchising. The franchising consultants get money by charging fees on every franchisee they bring to your franchising business. When the agreement contract is signed, the franchisors pay these consultants. To determine what kind of business they are interested in and to determine what kind of business actually suits their profile, the candidates are questioned in length by the franchise consultants. Thus, businesses pay good referral fees for each deal that is closed effectively and realize the role of franchise consultants.

Franchising can be quite challenging. Franchising consultants lead you through the intricacies of franchising to achieve desired results, in case you are about to franchise your business. To find potential franchisors, franchisees contract the consultants. Franchisers contract franchise consultants to find potential franchisees on the other hand. The franchise consultants are in business to serve both the franchisor and the franchisee, they are in business. It is important to seek the help of franchise consultants, after having decided to buy a franchise. In terms of costs, visiting a consultant is the same as going directly to the franchiser. They will assist you in making the correct decision. They will also assist in identifying lucrative potential franchise opportunities. They bring the franchisees and the franchising company close together. The type of business that suits you and your needs should be decided on your decisions. A good guide about the franchise business can be given by competent consultants. On franchising basics such as how the process works and business system, they are supposed to guide you. To understand prospective franchise candidate needs, his financial capital available, if the business offered is viable and if the candidate can make a success of it, franchising consultants have to be very careful and analyze the prospective franchise candidate. If he is not suitable for that business, they have to be realistic and make quick judgments and tell a candidate not to go for a business. For recommending bad prospects to clients just to make a hefty commission for themselves, some franchise consultants get a bad reputation. Your primary duty is to help people get the right kind of business, therefore try to be honest. Do not make a profit selling loss making businesses.

About Author:- Sparkleminds consists of individuals who are expert franchising consultants. Their expertise in franchise consultancy aims at converting any kind of traditional business into a franchise business. This particular article illustrates these aspects further.

Several of us are looking to get their own business but there are aspiring proprietors that are still pondering wheter to take a franchise venture or assemble a traditional business. A lot of are dreaming to have a productive business enterprise but only number of of them has their success story to share. You will find two choices in beginning a venture, you can start having your own business name or you can choose getting a franchise venture. Let us try and differentiate the two to help you come to a decision what suites you properly.

In a franchise firm there will be luxury getting aid from your franchising business, you are sure that their name and reputation is already set, you already have your clientele; franchise corporations already earned the belief from their potential buyers, so it would not be tough for you to get their confidence. You will also be provided of everything you need to have starting from seminars for yourself (this may equip you in managing your small business), trainings for your workforce, uniforms, stores, company brand and logo, food materials down to the particularly minor details like the utensils, tissue and so on. You already have a back bone for your business, due to franchising firms are being supported by massive and dependable companies this will guarantee your small business will live, compared to regular business in chich 80% of them close with in their very first year and only 20% survive. Even though franchising business also have rules and regulations, it will be tricky to use your own commercial ideas because they already created a strategy that is definitely tried and tested. Franchising companies are strict with their regulations, you need to sign an agreement in order for your to get the right to use their business name and logo, this will also show your partnership with them and you are also agreed to their terms and conditions.

Taking the risk of setting up your own agency name will take good deal of guts and confidence (and a lot of luck). Beginning your small business from scratch isn’t going to give you the convenience that a franchising business can provide, here you need formulate your own approach that will really work, there will be a great number of trials and errors, it will require time for you to obtain your customers trust due to most of consumers trust a brand or a trademark which is acknowledged or familiar to them. This will not present you with assurance that your business enterprise will be successful, this will depend on your strategies in managing your company. Starting your own business enterprise brand would be risky but when you’ve got the guts to go on together with your battle go forward and do it.

Regardless of whether you chose to own a franchise business or beginning your own enterprise brand, it is all up to you. Verify your knowledge of handling a business and you also have to consider your resources and funds. It is all up to you if starting your own venture brand or getting a franchising company will be a success.

Master franchise opportunities present one of the greatest opportunities for investors in the franchising industry offering high capital investors residual income for years to come. Master franchising offers the opportunity for an individual to purchase the rights to sub-franchise a franchisors business concept within a specific territory. Here a master franchisee pays the franchise company a significant initial fee to purchase the rights to develop the territory. Later on the master franchisor enjoys the benefits of most or all the initial fees and royalty fees paid over time by the individual sub-franchisees in the territory.

Investing in master franchise opportunities is one of the largest investments you will be making; hence choosing the right concept is extremely important. Here are some tips to help you to buy a franchise business in this segment:

Do Thorough Research: Research is something that you need to spend time on to search for best master franchise opportunities. When you decide to buy a franchise business and that also a master franchise, it is essential for you to understand two basic entities. First it is the franchise company and second one is the master organization. The franchise system must be based on a solid business model as without this a master franchise cannot succeed. Also dont forget to research the market and territory demographics to come to a conclusion about the demand of the product or service in the specified market.

Understand Your Responsibilities: A master franchisee is generally provided the responsibility of recruiting individual sub-franchisees within his territory. Apart from this, a master franchise owner needs also to provide support and training to individual franchisees. In fact, it is the duty of the franchisor to ensure success of sub-franchisees. Owners of best franchise opportunities often provide a detailed outline of roles and responsibilities of their master franchisees.

Meet Other Master Franchisees: The best suggestion about managing master franchise opportunities are the master franchisors only. Hence, try to talk to other people who have invested in master franchise. Arrange a meeting with some franchisors and try to find out what types of challenges they face, what kind of support is available, and any other queries. The more you can know from them the better will be for you to manage your business.

Business Must Suit You: Dont just get lured by the business proposal of top master franchise opportunities. Check out the business model thorough to make sure that it your investment limitations and your goals. Never go for a master franchise business that is much about your budget level. Plus, if you’re not interested in a type of business, then it’s not a good match for you to consider.

Visit Franchise Outlets: When you decide to buy a franchise business, be ready to invest your time. Before making a final decision you must take out time to actual visits to as many franchise locations as possible. This will give you a clear picture of about how good the master franchise business is that you are planning to invest upon.

To conclude, when you decide to buy a franchise business you must follow your instinct. You must be passionate about the business you want to invest upon.

It takes immense discipline and fortitude to survive a franchisor’s bankruptcy. It’s a good idea to have a plan to minimize any potential losses in revenue and reputation, just in case such an unfortunate circumstance arises. When armed with a plan, you’re more likely to avoid disaster and consequently keep your business afloat.

The following are tips designed to help you get through franchisor bankruptcy:

-Heed warning signs: Hear a rumor? Investigate it. You do not want to find out the hard way i.e., through a third party like a customer or the paper that the franchisor is bankrupt, since doing so can compromise your rights and interests. If someone murmurs bankruptcy, be on the alert. The worst case scenario is that you determine that the rumor is no more than a rumor, and business resumes as usual. Some signs are very subtle, so pay attention. For example, if your franchisor is collecting advertising money from you but you don’t see any advertising happening, be on guard.

-Have a crisis communication plan: Make sure you have a public relations campaign that includes a crisis communication strategy preferably, a strategy that includes several contingencies. For instance, if your franchisor goes bankrupt, the media and customers will be wondering if the business is in jeopardy. You want to be able to craft a quick response.

-Be sure to stay in touch with the local media: True, newspapers and media generally go straight to corporate headquarters for information but don’t let that deter you from establishing your own relationships with writers, reporters, producers, and news directors. This way, you’ll be in a better position to field inquiries should disaster strike.

-Keep a list of alternative suppliers: Occasionally the initial problems occur with suppliers who may be nervous about getting paid. Moreover, if the franchisor can’t provide supplies, a franchise must look elsewhere. Develop a list of viable and trustworthy suppliers to prepare for a possible distributer catastrophe situation.

-Maintain a stash of supplies: Your franchisor declaring bankruptcy could very well leave you with an inadequate amount of supplies. By keeping a surplus of items you may need, you can avoid this scenario.

-Ensure that the community is aware that you’re independently owned: While you don’t necessarily need to regularly remind your customers that you’re independently owned, you do need to establish your business as a separate entity from all the other franchises. This can be accomplished by either letting fellow business owners know or becoming involved in the community. You want your business to feel as local as possible, because customers tend to favor locally owned businesses over nationally owned ones.

-Get the support of fellow franchisees: Moral support from your colleagues even if they’re also your competitors never hurts. In fact, helping out your fellow franchisees in times of need could ultimately mean the difference between success and failure. If the distance between you and other franchisees isn’t too great, you may be able to share supplies, which would help everyone.

-Consult a lawyer specializing in franchising: Consulting an attorney who has expertise in franchising could end up being invaluable in the case that your franchisor goes bankrupt. The time and money you put into hiring an expert is, simply stated, an investment in your future. A lawyer can educate you about your rights and help you concoct the right business plan for your business. You owe yourself this and more as a business owner.