Tag Archives: franchise opportunities

Advantages of Franchising – Better Than Going It Alone?

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There are many advantages of franchising over starting a new business by yourself. However, you could lose a great deal of independence, which is why you decided to start your own business in the first place. Have a look at the pros and cons of franchising below to decide if its for you:

The Pros:

Since you will be taking on a venture that is already a proven success elsewhere, you can bet that there are many advantages to it. Let us take a look at what they are:

  • You will represent an established brand, and be part of a defined operating system and management structure.
  • You will not have to do any guesswork on whether this idea is going to work for you. Guess what, it is working and has been doing so for a while!
  • One of the main advantages of franchising is that the failure rate of is very low. In the U. S., only about 5% of all franchise systems fail each year, while 30 to 35% of independent businesses fail within the first year. Smiling already?
  • You are part of an established network of franchisee associates, who can help generate new ideas and provide additional support. What’s more, they act as a yardstick for you to measure your progress.
  • Learn from others’ mistakes! The mistakes have already been made and the pitfalls overcome. All you have to do is tap into the franchisor’s expertise, training resources and support instead of relying on your own judgment.
  • No advertising, no marketing pains! The products are already well known and you are riding on the coattails of someone else’s hard work. This is one of the greatest joys of starting a franchise.
  • Success begets more success! With franchise success comes potential for growth within the organization, such as opportunities to purchase additional outlets with special, pre-financed conditions.
  • If ever you decide you want out, you will surely be able to find a lot of people willing to buy an on-going business.

The Cons:

Okay, we are now done with the positives. Let us spend a few minutes on the inherent problems of starting a franchise. As with everything else in life, franchising comes with its share of pain.

  • You will not be your own boss. If you have always wanted to be completely independent then starting a franchise is not your cup of tea. You will never be fully independent to take your own decisions.
  • You will not be able to make changes to the operations in the franchise. You have to follow the tried and tested method. There is no scope for innovation.
  • You have to pay a royalty fee based on a percentage of your monthly sales.
  • If any of the other sister franchises generate negative publicity or media attention, your franchise will also suffer the backlash from such allegations.
  • It is more expensive to buy a franchise than starting your own independent venture about 40% more!
  • You will be bound by a contract with many terms and conditions. Learn to read the fine print.

That being said, it is now up to you to take that final step. Make that decision after careful thought and considering all the advantages of franchising along with the disadvantages. Once you have made the decision, go for it!

Is There a Limit to How Many Franchises You Can Own?

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The benefits of franchising are its low priced capital yet at the same time earns sizeable income or profit. This is the reason why most restaurants love franchising. Although a franchise opportunity is a good business, some franchisors still think they need to operate on other locations to keep their credibility and earn more franchisees. Other continues to buy franchise and operate in different areas to check out new concepts that may or may not work for them.

Despite the number of units a franchisor own, the big question still remains and that is how much is the percentage profit of the company ownership? Some restaurant executives claimed that you’ll only know the amount once you know it. Confusing right? A conference in Four Seasons Las Vegas was held, “Franchise Finance & Growth” where most of the panel present in the conference were restaurant executives and they indeed claimed that the percentage is not done in magic. This was in fact said by Jim Greco who was the previous owner of Sbarro and Bruegger’s.

Most successful franchisors have long been unloading in different locations such as the famous Applebee’s or the Burger King. On the other hand, there are some franchisors who still believed to buy franchise based on percentage. According to the chief executive officer of Wingstop which is based on Texas, the practice of holding on to an owned franchise is not really needed. Charlie Morrison thinks that franchisors need to explore other places to check and better understand variables of other market consumers and its locations.

Lastly, Jim Greco provided a thought to ponder to those who want to buy franchise. He said never to combine a company to a franchise. By combining these two entities may result in chaos or conflicts. According to Greco, creating multiple franchises gives you an idea of the variable from one store to another. Franchise opportunity is everywhere but it must be understood properly to run it smoothly. Having multiple franchises is good and you’ll just know what ratio is enough once you’re starting to profit enough. After which, grabbing a franchise opportunity will then be considered as worth it.

Top Franchise Investments According to the Street

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Every aspiring entrepreneur should consider five areas if he wants to succeed in a franchising business.  He will need to look at the initial capital, profitability, demand for service or product, knowledge of the business, and leadership skills.  Establishing and maintaining strength in all these areas will guarantee success for your franchise venture.  But how to pick the right venue or the right franchise may still be a bit of problem especially if you see the market with a lot of franchise opportunities.

The Street provides reports on financial news, stock markets, and quotes and analysis of what’s happening on the stock market scene. It has recently come up with a list of names that offer good franchise opportunities to help entrepreneurs make up their minds if they want to buy a business.

  • Jersey Mike’s Subs has more than 500 stores across the country and it’s still growing.  Its famous lunch menus have consistently drawn patrons to its restaurants and giving it a solid name in the food business sector.
  • BrightStar Care provides medical services including child care, elder care, and in-home adult care.  This is one good industry to invest in because a lot of baby boomers are expected to reach retirement age.  The aging population will cause expansion of the healthcare system which will bring stronger demand for this type of franchise.
  • The Dwyer Group is at the top of the franchising chain of businesses.  It is the head company of eight other brands like Mr. Rooter, Portland Glass, and Glass Doctor.  CEO Dina Dwyer-Owens said that she attributes their success to their ability to expand without increasing overhead in their personnel.
  • Fastsigns is a business that focuses on making signs, digital prints, decals, and other custom solutions for several business companies.  Currently it has 530 businesses locally and abroad. They have acquired the highest franchisee scores when it comes to satisfaction.  The demand for their type of business is considered “very hot” and is expected to be around for a long period of time.

There are more choices out there but more importantly when you consider to buy a business you should gauge the strength of its management.  It shouldn’t just fall on the shoulders of two people.  President of Franchise Update Media Group, Steve Olson, said in an interview that before entrepreneurs choose a franchise they must analyze their own capabilities, strengths, and management styles because whether they acknowledge it at the beginning or not these factors will have an impact to their business in the long run.  There should be a never ending willingness to learn and a strong commitment to succeed.

Franchise Trends: Know How to Maximize Success

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Unlike having your own business, choosing to purchase an existing business franchise provides entrepreneurs a strong foundation to start their careers. If you are thinking of choosing this option, you have to have an idea on the franchise trends for your franchise to become successful.

1. Milennials

According to Franchising.com, the millennials are outdoing the Baby Boomers to become prominent players of consumerism. As millenials begin to join the workforce and build their own families, it has become necessary for franchise operators and independent business owners to target this group. Learning more about this market’s growing demands and needs can provide you a head start when you purchase a franchise for sale.

2. Baby Boomers

Baby Boomers may be nearing retirement now however according to Franchising.com this group can still be targeted in a new way. An aging generation, new demands and needs are starting to grow such as healthcare franchises. These franchises are becoming even more popular as the group starts looking for additional support and assistance. If you’re in need of a market keep the Baby Boomers in mind.

3. Multi-tier Models

One of the methods you can do to make your franchise business successful is by making use of multi-tier models according to Fox Business. This means that you do not only operate a storefront but also make use of the mobile and internet world to expand your market and maximize your profits. With this method, prospective franchisees are now able to welcome the opportunity to gain more profit through several means.

4. Veteran entrepreneurs

For the returning veterans who are in search of business opportunities, a career in entrepreneurship is the ideal choice to have as reported by the SmallBizTrends.com. The increasing number of soldiers returning home left many individuals looking for employment after serving in the military. To help these people, VetFran organization introduces veterans to promising franchise opportunities. If you are able to meet the qualifications and are interested in owning a small business, then you will find plenty of help available. Over 2,000 veterans have already benefited from the program.

Whether you want to run your own business franchise sooner or later in life, being attentive to the franchise trends now and then can increase your chances of having a successful business. Being equipped with enough knowledge on the various changes in the franchising industry can provide you the edge among your competitors in the market.

Research Shows Steady Growth for Franchise Opportunities

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Franchise opportunities are growing because the franchise business is on a roll! According to the International Franchise Associaiton and FRANdata, the environment for franchising businesses has constantly grown for the past three years and there’s no sign of it stopping in the near future.

Reports show that the demand for new lending capital is at $11.7 billion and franchise financing is at a close $9.5 billion.  And the gap between these two continues to shrink from 2010 to 2012.  Bank projections also indicate that there will be an increase in demand for franchise financing.  People are now aware that investing on franchise opportunities make money faster compared to putting up a new business and introducing a new brand in the market.

Jon Luther, IFA chairman, says that franchising growth has created a lot of jobs in many locations.  This is helping the economy of that region.

It would take about $30,000 to put up a new business from scratch, according to the Business Finance Store.  And the risks are even higher if you’re building everything from the ground up, including a good reputation for your brand name.  This is why a lot of entrepreneurs are turning to franchising instead.  Some franchises, some even real good ones, can start with just a few thousand bucks.

One good example is a homebased franchise opportunity that can get started with just $1,500.  The benefits are just the same as putting up your own franchise retailing business but minus several overheads. You will get noticed through brand recognition; this is how franchisees get success faster compared to new brand names in the market.  You won’t need to pay for equipment, monthly staff salary, rent, and other expenses.  You can easily do this in the comforts of your home and it’s a one man show.  If you’re internet savvy then this is an ideal opportunity for you.

For those who want to roll up their sleeves and be more hands-on with their business can invest on franchises such as the Soccer Shots. Their business is all about soccer development programs for kids who are 2 to 8 years old.  They’re start up investment is only $13,395. It’s not even half of what you’ll normally need in a startup biz.

The good news is, lenders now recognize that franchise businesses know how to make money faster that’s why a lot of lenders have opened up doors for entrepreneurs who want to venture into franchising.    Some entrepreneurs haven’t even realized that financing a business with retirement funds is an good option.

How Success is Achieved through Franchising

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Before you decide to venture into franchise opportunities it’s very important to do your research on the franchisor.  And it will also be to your benefit to make a thorough assessment of yourself.   Your business and you should mesh well together because you and your business will become synonymous once you start operation of your business.  People will start attaching your name to your service or store.  Whether you’re running a franchise or an independent business, the way you run things in your business will be a great reflection on yourself.

In franchise opportunities you make money by following a system.  But there are innovations you can do while still following procedures without sacrificing quality of the products.  Deviating from procedures can cause differentiation of products which will not be accepted by the franchisor.  But franchisees are allowed experiment and find ways to deliver the same quality of service or products more efficiently.

The Wall Street Journal clearly spells out where the success of franchisees comes from, it will highly depend on how well they’ll follow and execute the system set by the franchisor.  Some people may get the wrong idea about franchising they may think that it’s an easy “make money” or a “get rich” scheme.  But owning a franchise business requires a lot of hard work before you can reach financial success.

Try to talk to other franchisees about their business and find out as much as you can about the company.  You may be surprised to discover some details not readily mentioned by the franchisor during your inquiry with them but franchisees will be more than willing to give you more information about the business.  This will help you prepare yourself for your own franchise business.  It’s always a good idea to know what’s in store for you in the business world.

Franchise support is a big piece of your franchising success.  It’s important to know what kind of support will be offered to you.  In general, franchisors will offer consultation on location, support in marketing, help in hiring employees, training of employees, and overall all business operation like applying for licenses, permits and other paper works for your store.

Ultimately, it’s how you run things and how you manage it will be the big basis for success.  If you constantly meet the standards that are expected by your consumers then there’s no way for you to fail in your franchise venture.

How to Succeed as a Veteran Owner of a Small Business

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It is common for military men and women to be unemployed after returning from their active duty. If you’re one of them and are thinking of entering the workforce to re-establish your life, you might like to consider utilizing your entrepreneurial skills. One of the first steps you can do to find employment and fulfillment upon your return is to start a business or buy one of the business franchises for sale.

There are a number of veteran services that are available to people who have interests in this type of work. Several of these services are provided by government organizations. One of the groups that can help individuals who are interested in opening a business is the Department of Veterans Affairs or VA.

Owning a business

According to the VA reports, the first thing to consider toward owning a business is creating the ideal plan for the company. To do this, you need to generate ideas on all aspects of business ownership including the products and how the company can acquire business funding. There are Small Business Dev’t Centers associated with the US Small Business Assoc. that can provide help in creating a business plan with great potential for success.

A number of mentoring programs and counselors are also available to provide the veterans free services. Both inexperienced and seasoned entrepreneurs can greatly benefit from these services.

Starting a business franchise

If you think that starting a business of your own does not suit you well, then you can consider buying a business franchise. With a franchise, you will be able to own and start a business that is part of a bigger company that has already established its name in the market. Typically, franchisers provide training and funding for their franchisees, which are necessary to help your business franchise achieve its goal to become successful.

Online resources

One website that you can visit to learn more about the franchising world and how to be a part of it is the VetFran.com. This site is dedicated and passionate in helping the veterans find the suitable franchise opportunities for them. The site also provides resources and training to novice entrepreneurs. The VetFRan.com site aims to assist veterans in becoming the top business owners when it comes to the industry of entrepreneurship.

The IFA or International Franchise Association is VetFran’s parent company. IFA is also dedicated to helping the veterans excel in their chosen entrepreneurial ventures by providing them the needed tools and resources to succeed.

Part 2 – The Big Dont’s of the Franchising Business

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A lot of new entrepreneurs become very tenacious when it comes to jumping on franchise opportunities. They want to make money quickly by banking on the national brand that is already trusted by a lot of patrons.  But they still make some errors along the way; here are some of the mistakes often committed by new entrepreneurs;

  • Failing to read and understand the business plan of the company

Before getting into the bandwagon of a franchise opportunities create a budget and review the startup expenses. Try to stir away from paying too much for your equipment.  You can ask other franchisers about less expensive products but of same quality.  If you directly get your equipment from the franchisor then you may be spending more than you bargained for.  Remember that you still have other expenses to worry about at the end of the month like bills, rent, and salary of your staff.

  • Failing to read and understand the Franchise Disclosure document

It is crucial for any entrepreneur to understand what kind of agreement he is signing in to.  Under the Federal Franchise Rule it is mandated by the Federal Trade Commission that franchisors should report such information as performance of company, risk factors, franchisee’s obligation, restrictions, and other details.

  • Not following the business plan

The business plan is the map how the brand reached its success.  It is the guide to help manage the business the way it’s managed by the franchisor.  It includes hiring of personnel, distribution, projection of sales, budget planning, sales and advertising.  It’s important to realize that there are legal implications associated to this agreement if you don’t stick to it.  So review carefully all the terms and conditions to avoid possible violation on your end.

  • Not getting support from your franchisor and other franchisees

It’s easy to make money in this business if you started everything the right way, but any form of business is still a gamble.  What is booming right now may have a different story to tell after just a couple of months.  One way of keeping afloat in the game is to network with other business franchisees.  Don’t stick to business owners in the same line of service as yours.  Try to get to know as many entrepreneurs and add them to your contact list to help you build awareness about the business world.  Join as many groups and associations as you can. You can join a community of franchisees and be visible during community events to allow them to get to know you too.  This can help you build your business and find support in a lot of areas.

 

Part 1 -The Big Dont’s of the Franchising Business

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Franchise opportunities can certainly reel in a lot of cold cash in your pocket.  But if you’re considering getting into this type of business there are a lot of don’ts that you should also know before investing your time and money into the deal;

  • Research about the franchise opportunities

Some people make the big mistake of diving in without doing their homework.  If you have your eye on some franchise businesses then investigate on their market trends, history of the business, the demand in your local area, and how economy could impact their service or products.  What you think is a sustainable long-lasting business can turn out to be just a market craze and fizzle out later on.  So before you get make your investment it’s better to investigate on how well it will grow over a period of time.

  • Research about the demands

If you see the brand in every corner of your street, then that means your area is already saturated with their products or services.  It may not be a good investment after all.

  • Not planning for growth

When you make money out of your business this is a good sign of growth.  But some business owners get over excited and start growing too soon without carefully planning of their logistics and finances.  They end up losing more instead of gaining more in the process.  Before considering expansion, business owners should study factors like where their current patrons are coming from, or how is the current sales faring to last year’s and last month’s sales.  And more importantly, will the demand be strong enough to sustain the new franchise in a different location.  A thorough investigation and analysis of these factors will determine if the business is ready for growth.

  • Not setting a regular financial forecast

A financial forecast will give you an idea of how much you will make on the next month, the next week, or even the next year.  This will give a clearer picture of how your business is doing.  Another benefit of conducting a regular forecast is that you are able to forecast your expenses too.  Budgeting also come in to play in your financial forecast.  Change in sales should also be included in your budgeting plan.  The key is to save money to make money.  One important thing to remember when making your budget is that you should make it as realistic as you possibly can and try your best to stick to it.

Credit Access Levels in Hospitality Franchises and Food Service Continue to Improve

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Franchising and franchise opportunities are still recovering after the recession as reflected in the 2011-2012 franchise financing rates. A recent index from International Franchise Association & BoeFly revealed that lending to franchises showed a 3.18% gain between March 2011 and March 2012.

People who want to start a franchise need to know what industries are showing above-average growth.

BoeFly co-president Mike Rozman stated that hospitality and food service industries have been demonstrating growth even with the financial crisis and are expected to grow further in the months to come.

Individuals interested in these industries can choose whether to own a restaurant or a hotel, whichever suits them.

Street Directory noted that entrepreneurial spirit and the willingness to stay within the restrictions of the established business model are needed to have a successful franchise in food service.

Some of the business-minded people will appreciate the franchise restrictions and utilize them to help their franchise business however others may not like the idea of following someone else’s regulations. After all, most people choose to open or run a business to be their own boss.

Some individuals are attracted to the food service industry and dream of creating unique menus and cultivating an ultimate diner ambience. Franchising is less likely to be suited for these individuals since it follows a standard model and leaves no room for personal creativity. Street Directory stated that buying a franchise means entering an established business with proven record of success. Franchisees have the responsibility to run the enterprise as effectively as possible while adhering to its guidelines and regulations.

According to the Hotel News Resource statistics, less than 40% of US hotels were brand-name enterprise 20 years ago. Currently, around 80% of the US hotels are either branded or brand-affiliated.

The franchise financing growth observed in the food service and hospitality industries suggests that the trend is expected to continue. Robert E. Braun, hotel lawyer of JMBM Global Hospitality Group indicated that there are cases when hotel franchisors help in the funding of a project by providing credit enhancements or loans. Franchisors are more likely to get their money back however this is not the case with franchise financing acquired from other venues, which puts the franchisee and the franchise more at risk.

It is important to do a thorough research on the various hotel franchising options before planning to buy a business franchise to avoid committing major mistakes.

When it comes to franchise lending, the year has been practically static. Individuals interested in starting a franchise in the hospitality and food service industries will be glad to know that the industries have been experiencing above average credit access levels. As an entrepreneur, try to research more on these sectors to avoid quitting halfway just because you felt that you weren’t suitable for such franchise after all.