All posts in Franchising

Many would agree that selling your business, or at least the rights of it, is not easy. Of course, it is emotional for you especially if you really worked hard for it, then letting go may be hard for you to do. And others also see selling the rights of a business as a new beginning. They see it as an opportunity to expand their business and make it more known to the people. This part of the business development may be a rollercoaster ride for some of the businessmen, but before they consider the thought of selling the rights of their business (franchise), they must first rationally evaluate their business to see if it has these much needed characteristics before franchising.

These characteristics are:

Credibility. Before selling the rights of the business, you must first establish your credibility in order to be sellable to other business investors.

Distinctive. A business must stand-out in order to be noticed. The distinction might be in the products or services you offer, it may also be from the marketing strategy or the lower investment cost or a different target market.

Easy to operate. When you are selling, you must think that the business investors or buyers are relatively new. So, to help them succeed in their endeavor your business must be easy to operate.

Adaptable and in demand. These characteristics are important especially if your franchise will be brought to new locations. The services and products should also be in demand so that selling it would be easy.

Fast return of investment. Your business must give the franchisee a fast return of investment. It does not have to be automatic but it should also be reasonable.

Strong management. In franchising, you must be able to produce strong managers to prevent the business from faltering.

If your business is all these, then selling it would be easy. But it also comes with lots of paper works and legal stuffs. You may be a good businessman but you might need a good and expert conveyance partner to help with these paper works and legal issues.

Your commercial conveyance solicitor will be the one to prepare your franchise plan. He will make the business outlines with your guidance of course. If a franchisee is interested in your franchise, then he will draft the franchise agreement and the Franchise disclosure document. These documents must also be in line with state and national laws and must come up with the legislative requirements.

Before selling the rights, you must also register your intellectual rights to it since you are the original owner of the business and the idea was yours.

Contracts that needed to be signed will all be prepared by the commercial conveyance solicitor. So, they actually help you by being in charge of the legal and paper work aspect when you are planning to sell your business. This helps save a lot of your time. That is why, selling your business is now easier to do!

Business franchising agreements are commonplace, and tens of thousands of these contracts are signed every single day around the world. More often that not, the agreements underpinning business franchising arrangements are written by qualified and skilled commercial lawyers experienced in this kind of arrangement. However, thats not always the case, and many business owners choosing the franchising route consider a DIY approach to contract formation, which carries with it its own risks and pitfalls. Whichever route you choose, there are a number of key contract terms you should look out for in franchising agreements that are of importance to both the franchisee and franchisor.

A crucial set of terms included within the typical business franchising agreement are those relating to payment. Business franchising is a worthwhile agreement for both sides, but the payment terms stipulated are of critical importance in determining whether or not its good value all round. Normally, business franchising agreements are comprised of an initial upfront payment along with a periodical payment of royalties, although this varies to a greater or lesser extent. Understanding the exact nature of the payment terms of the agreement will enable you to determine how much you will be required to pay as a franchisee, and will allow you as a franchisor to calculate how much income can be generated from the franchising business model.

Another critical term to look out for, particularly as a franchisee, are those relating to the resale of your franchise, which can determine whether or not a business franchising agreement is. Some franchising models prevent resale without the permission of the franchisor, whilst others requiring strict interviewing of new prospective franchisees or even prevent resale altogether. This can obviously have an impact on whether or not the deal turns out to be good long term value, and it may have an impact on whether or not you should opt for that particular franchise package.

As a franchisor, you should look to include provisions within the contract relating to pricing control, or generally as to the autonomy afforded to the particular franchisee. The business franchising relationship is one of greater or lesser autonomy, and you need to decide how much freedom to give to your franchisees. Remember its your business at the end of the day, and you need to be sure you want to surrender some degree of freedom and of where you want to draw the line. Establishing this within the business franchising agreement will solve any problems that may arise later down the line.

Business franchising can be a particularly profitable business model for both sides of the agreement, but the agreement itself must be watertight to begin with in order to avoid problems as the agreement progresses. By making sure your business franchising agreement is complete and tackles all the relevant issues head on, from payment to resale and beyond, you should be able to prevent disagreements and make sure that both sides understand their rights and obligations as pertains to that business franchising agreement.

If you are planning to start a new business that helps you to open new gateways of profit, food industry is quite a tempting sector that you will surely love to invest in.

If you are planning to start a new business that helps you to open new gateways of profit, food industry is quite a tempting sector that you will surely love to invest in. But before investing, it is necessary to have good knowledge about the food industry and other relevant issues. It is very important to decide well about what type of business is suitable for you. Restaurant franchising opportunities is the best option if you are newbie in the food industry, as it will allow you to explore and enjoy the readymade business.

There are many brand food organizations that offer a wide variety of restaurant franchising opportunities such as fast food centre, health food centre, take away centre and many more. To make things easier and successful for you, this franchisee provides you proper marketing strategy and training help. You will come across many franchising opportunities who hand over different strategies for your business. So before becoming an authorized franchise dealer of any brand, make sure you select the one which you are more interested.

There are basic things which you should consider if you are opting into the business of food industry. It is very important to know before buying any franchisee, the kind of skills you posses to run the business. Restaurant business is the one which you need to work for hours and ensure that all your customers are satisfied. All these skills are essential in order to have both financial and management keeping skills. Another main thing one should do before investing into venture is to do deep research. Ensure that the facilities offered by the franchise offer quick serve restaurants facilities. All this crucial information will help you in leading your business in the market successfully.

The food industry is a big one with various segments and sectors to explore. Hence it is important that you know your choice of restaurant franchising opportunities before taking your step forward in this industry. From fast food, healthy food to multi cuisine restaurants, there are ample of restaurant franchise opportunities waiting for you to explore and invent. It is always suggested that you research and survey about the changing eating habits and trends of people well before deciding on your choice of business in order to enjoy profitable gain.

Another major thing to consider before opting for your choice of restaurant franchising opportunities is that you should know about the budget or fund that you can afford. Different companies require for different values as fee in accordance to the market reputation and recognition.

One major factor that is of utmost importance while running a restaurant for sale is that of consistency. People come back to the same place if they receive same quality of service, if not better, and this consistency of providing quality food and service forms a loyal customer base. If you think that the restaurant business is ideal for you, and then you just need to search in online directories where you will find thousands of restaurant franchising opportunities awaiting you.

Resources: John is the author of this article on franchising opportunities. Find more information, about Quick Serve Restaurants here

Your business is up and running and your customers are coming from near and far to buy your products or services. It might be time to franchise your business if you think your business is unique enough to expand a new branch into every town in order to maximize your brand presence.

Franchising a business can be very profitable and can provide the exponential growth otherwise not possible. It gives the franchisors a chance to expand their businesses manifold and this means generation of more profits and more capital gains.

Another benefit of franchising a business is the lower capital requirement. Franchisors can limit their costs by opening a chain store rather than opening a second store. The franchisor will only need to pay for training and administrative aspects once a franchisee acquires one branch. Franchisees need to bear certain part of the day to day running expenses of the business and keep control of the daily affairs. This saves the franchisor of botherations that otherwise would have fallen on their shoulders had they open an altogether new branch under their direct supervision. However, to start off a franchise; franchisees need to have a significant amount of cash at hand. Although they may pay an upfront fee, franchisees will be assisted by the parent company at the start of the business. This includes arranging the lease agreements, designing and constructing the store, and marketing strategies.

Franchising allows you to grow without sacrificing control over the business. You may not have minute by minute control, but you have control over how franchisees should operate the business; you create and dictate the operating system. If franchisees don’t follow your system, then you can revoke the franchising agreement and take back the business. This is another benefit of franchising a business.

Knowing how to franchise your business is essential. There are different ways in which a business owner can convert his traditional business into a franchise model. You will want to consider the best opportunities that match your lifestyle, business and financial goals. Without knowing how to franchise your business you could spend a tremendous amount of time and effort trying to find the exact way.

Hiring a franchise consultant is not only the best beat when considering franchising your existing business but also essential. Franchise consultants provide different types of franchise services, from buying a franchise to franchising an existing business. The franchise consultant will devise a plan for you which ensure that you are going in the right direction.

Franchise consultants, along with your franchise attorney, provides you franchise services to establish your initial business plan, help iron out any questionable details or omissions, and design the best proposal to present to the marketplace. In addition, they can assist you in finding the best franchisees to invest in your company, and successfully match you with partners who are more likely to be successful in maintaining your brand’s integrity.

Franchising a business can be an effective tool to ensure its growth and larger market share. Many businesses have gone this route and become global leaders in their line of operation. Such companies include: McDonald’s, KFC, Dominos, Pizza Hut and many more- However, franchising cannot be tailored for every business owner. So, it is advisable to talk to franchise experts before you start franchising your business.

About Author :

Sparkleminds is one of its kind organizations that provide franchise services for corporate houses. They have expertise in franchising a business by creating consciousness among masses about various facets of the franchise. This is one of the major objectives of Sparkleminds. This particular article illustrates these points further.

This is a question I believe a lot of people are asking themselves these days in America. There are so many people out there looking for a plan B, and not a lot of people really know what would be the best option for themselves. I am writing this article because I have a lot of experience in both scenarious.. I am the owner of multiple locations of two different franchises, and have served as a franchise advisory board member and advertising advisory board member for Palm Beach Tan, the largest tanning franchise in the country. I am also building a multi-level marketing business (or network marketing business), and my team is spread throughout the country, with people in almost every state in the U.S. I will argue the pros and cons of both options, AND I will let you in on a few secrets I have leaned the hard way that are absolutely critical to being successful in both situations.
Lets start with buying into a Franchise.
Here are some advantages:

1. Proven Business Model: There are many benefits to buying into a franchise, but the most popular is theoretically being able to open a business with a proven business model. The statistics show that about 80% of businesses fail within their first few years, but the chances of a franchise business failing is closer to 20%. The franchise percentages are skewed quite a bit though, because a franchise is much easier to sell, so what ends up happening is a failing franchise might go through two or three owners before it actually shuts own. The existing owner always has good excuses why it is failing and the new owner always thinks he or she is the savior and will be able to turn things around.. Sometimes the franchisor will take over the location to delay the inevitable because the last thing that want on their Franchise Advisory Ciurcular is store closures.. (they are generally in the business of selling franchises)

2. Help With Start-up: You get a lot of help starting your business and running it afterward. Many franchises are, in fact, turnkey operations. When you buy a franchise, you get all the equipment, supplies and instruction or training needed to start the business. In many cases, you also get ongoing training, and help with management and marketing. Your franchise will reap the benefit of the parent company’s national marketing campaigns, for instance.

3. Marketing and Branding: When you open up a new location that’s part of a franchise with a strong brand you are able to do SO MUCH more than other new business who is not part of a franchise. For example, if you open up a new Subway in your town, and if you did not do ANY advertising at all people would still walk into your location and buy sandwiches. (Unless your location was in a back alley where nobody could see you!) AND the budget you allocate toward advertising and marketing is much better spent for two reasons: One, you’re not throwing spaghetti against the wall to see what sticks – your franchisor should guide you on what works and what doesn’t. Two, your marketing: direct mail, business to business, radio, TV, etc. will be much more effective because people recognize the Subway brand and will open up your mail, or listen to your ads.

4. Buying Power: Your franchise will benefit from the collective buying power of the parent company as the franchisor can afford to buy in bulk and pass the savings along to franchisees. If you are an independent company you can except to pay more for inventory and supplies then if you are involved in a franchise.
Here are Some Disadvantages:

1. Royalties and Ongoing Costs: Most people don’t realize how much of your gross sales you really pay out every month to the franchisor, and other vendors they are partnered with. Traditionally royalties begin at 4% of gross sales and end up at 6% by the third year in operation. Next you will have a 1% advertising cost that goes toward branding advertising admin costs. They will probably force you into an advertising co-op which will be about 4% of gross. You will have some type of point of sale computer monitoring monthly fee for around $500. And don’t forget a lot of franchises have some type of reimbursement program for customers visiting multiple locations with gift cards and coupons. After all this is added up you end up spending about 11-13% on fees and group advertising. Even if you backed out 4% for the ad fund co-op since this is driving traffic to your business, you are still forking out 7-9% every single month! That adds up – trust me. It will be anywhere from $20,000 to $130,000 per year for small businesses, depending on your sales and fee structure!

2. Their Way or The Highway: The main disadvantage of buying a franchise is that you have to do it their way – sometimes right down to the way the napkin holders are filled. As a franchisee, you are not the one actually running the show, and some franchisors exert a degree of control that you may find terrible. In many cases a franchisor will enforce a policy that might work well for the majority of franchisees but it does not work well for some – it can actually cause a major cash flow crisis for some owners but the franchisor will not budge and actually force people out of business. (Trust me this happens I have actually seen it happen within my own franchise)

3. Ongoing Support? Not all franchisors offer the same degree of assistance in starting a business and operating it successfully. Some are just start-up operations and everything after start-up is up to you. Often times the franchisor promises ongoing training and support that just doesn’t happen.

4. Shark-Infested Waters: Buying a little-known, perhaps inexpensive franchise can be a real gamble. Just because a business is offering franchises is no guarantee that the franchise you buy will be successful. In some cases, franchising is the business; all the franchisor is interested in is selling more franchises. Whether or not the individual franchises are successful is irrelevant to them. This is not to say that no little known, inexpensive franchises are worthwhile, but just a reminder that any franchise you’re thinking of buying needs to be investigated carefully. Remember the franchisor is in the business of selling franchises, so be very fastidious!
Joining an MLM or Network Marketing Company.
Advantages:

1. Low Start-up Cost: The typical start-up cost for a network marketing company is around $200-$500, and with many companies you can actually get started for as low as $35, or even free. However, if you enroll for less than $50 you are usually not eligible for commissions until you upgrade or order some product or the service.

2. Unlimited Income Potential: More millionaires have come out of the MLM industry than any other industry – multi-level marketing is actually the most pure form of capitalism. An average person can literally go from being broke to making six figures a month if everything falls into place. If somebody gets in on the ground floor of a company before it hits the momentum stages, he or she is being mentored by a top leader, he or she is an extremely hard worker and does not give up easily, and he or she is an influential person (or he/she has built up an online influence) then it is only a matter of time before he/she builds up a massive residual or passive income.

3. Personal Growth Training: The network marketing business model works the opposite of the corporate world, where it’s dog eat dog. In network marketing all the top earners are usually the best teachers, not the best sales people. In order to get to the top of the pay scale you are required to have many people in your organization promoted to the top tier positions. For example, if some big shot decided to get involved in an MLM and the only strategy he used was to spend a truckload of money on advertising and personally enroll hundreds of marketers he would make some good money doing that, but he would probably not reach the top position in the company that way. Most compensation plans are designed to develop leaders. The leadership and marketing training that you gain in MLM is priceless for future endeavors.

4. Passive or Residual Income: When somebody builds a successful network marketing business they build an income generating asset that produces cash flow every month for work previously performed. If you wanted to have $5,000 a month in passive income risk free you would need over $1 million in a CD or other high yielding risk free account. I actually sold my first MLM business to another marketer right after I graduated college and used the money for a down payment on my first house. (It was producing a monthly cash flow, which turns it into an asset you can potentially sell)
Disadvantages

1. It is not get rich quick: Some people are attracted to network marketing because it is presented to them as this magical formula where all you have to do is sponsor three people who sponsor three and so on, then you have have this massive organization below you after three months that is bringing in $10,000 a month. Yes there are some occasions where people get in with a new MLM and have a large database of people they can tap into and they build a large income very quickly. It usually takes at least 1-2 years before decent residual income starts coming in.

2. Many choices: There are so many different MLM’s out there with all of their distributors claiming they “have the best product ever invented” and nobody else can compete with their company. One of the main reasons there is so much negative press around MLM is the competition between the different MLM companies cause marketers to bad mouth one company to make their company sound better. What this does is give the impression that MLM in general is bad, when in reality that is just not true. You can not believe everything you read online about a particular company, so you must do your own investigation before you join.

3. Must be self-motivated: You don’t have your franchisor out there doing radio and TV ads to promote your business, or a franchise compliance division coming into your store making sure your operation is running smoothly and efficiently. (not all franchises do this either, but you get the point) Your success is truly determined by how much effort you put into your business.
Which is the Better Way to Go?

This is the question you can only answer yourself, but please keep in mind a few lessons I have learned along the way:

-The franchisor is in the business of selling franchises so, again, be very careful. They have sales people who make anywhere from $2500-$5,000 per franchise location they sell. So this salesperson’s one main objective is to get you qualified and locked into a location.

-You MUST talk to as many owners as you possibly can about how they are really doing. Get numbers. Do not listen to the franchisor because they will stretch the truth about everything.

-If you can find an MLM company that is in the beginning stages, has some type of a marketing edge over everyone else (so you don’t have to go out and talk to everyone you know about the business), and has a powerful team of leaders you can directly work with and be mentored by, then I would think very seriously about choosing this path. Having the opportunity to start and own your own business for usually around $500, with the potential for cash flowing five figures a month in passive income in a relatively short period of time is much more enticing to me than risking hundreds of thousands of dollars on a franchise that is usually much riskier than people realize. However, if you do decide to join an MLM company make sure you do the research to find out if you will be with a rapidly growing company and will be personally mentored by top leaders in the company.

If you are somebody who is seriously considering one of these options, or already owns a business, franchise or not, and would like some advice on building a business or marketing your business schedule a free 20 minute coaching session with me or my partner. If you are not and are just doing your preliminary research I wish you well on all of your endeavors and findings.