|
Thursday, 09 October 2008 09:01 |
In recent times there has been the prevalence of conversion of independent businesses in same industry into franchise units. This has fostered the rise and growth of a number of franchise systems. Now the question that arises in the minds of all businesspersons is that whether considering franchise is gainful. While venturing into franchise the pros and cons of it need to be adjudged properly. Only then can you, the businessperson, proceed towards conversion of your independent businesses to franchise. There are both advantages and disadvantages of conversion of your business into a franchise.
By this conversion you may get a considerable marketing advantage if you are associated with an established brand. This is especially so if the brand has a national or regional significance. Leading brands automatically drive in more customers and thus more profits. Again, a significant purchasing power savings is obtained by being associated with a large system having a much better bargaining power than a single independent operator. Besides, by changing over to franchise the benefits of an operating system of a concern of choice, which is tested and proven by many other operators to have produced the highest possible level of success in business, is obtained.
There are also some disadvantages lying in converting independent business to franchise. Fees and operational flexibility pose as important drawbacks. A converting franchisee requires paying both initial and ongoing fees. These are the fees that represent the expenses, which are not incurred by an independent operator. So, it is pointless to opt for the franchise unless the increased projected revenue, cost savings and profitability will more than offset the fee costs. Again, a franchise system has many rules based on which a franchise business is to be run some of which may seem uncomfortable. This is not the case in independent business.
In order to evaluate the prospects of conversion the franchisor may conduct a business review of the existing operation and inform the prospective franchisee of the key charges required in conversion. In this way the benefits that will accrue to the operator upon converting can be listed. Thus, a wise decision can be taken upon consideration of the profitability prospects.
Article Source: http://www.articledashboard.com
Barney Garcia writes about many different topics. He is a proud contributing author and invites you to his websites. www.top-notch-franchise.info and www.franchise-for-all.info
|
|
|
Wednesday, 16 July 2008 22:00 |
|
For those who are considering buying a franchise you will need to know that the initial franchise fee is not the only cost to secure that business of your own that you have always dreamed of. The Initial Franchise Fee is generally the money paid for use of the rights and trademarks. There will also be other costs and fees to be paid to start the business, as well as ongoing fees such as royalties and other costs, which will be described in the UFOC Uniform Franchise Offering Circular. Below is an excerpt on Item 5 from a Uniform Franchise Offering Circular, which I prepared for my company; ITEM 5 INITIAL FRANCHISE FEE We offer franchises on a single unit basis. The Initial Franchise Fee is $20,000 and is payable in a lump sum upon signing the Franchise Agreement and may not be uniform in all cases for persons purchasing a franchise under this offering. We may allow you to enter into a direct financing agreement with us for a portion of your Initial Franchise Fee. Upon signing the Franchise Agreement, $10,000 of the Initial Franchise Fee will be deemed fully earned and non-refundable in consideration of administrative, marketing, legal expenses associated with preparing this and other documents required by the government to protect you and other expenses incurred by The Company in granting the franchise and for our lost or deferred opportunity to other potential Franchisees. If you fail to satisfactorily complete your training course, the remaining $10,000 will be refunded or, if applicable, subtracted from the balance due any direct financing agreement you have with us. -- -- -- -- -- -- -- -- -- -- -- Be sure to thoroughly go through the UFOC and read every page of the attached disclosure documents and franchise agreement, even take it to an attorney if there is anything in there you do not fully understand. Consider all this in 2006. "Lance Winslow" - Online Think Tank forum board. If you have innovative thoughts and unique perspectives, come think with Lance; http://www.WorldThinkTank.net/wttbbs/ |
|
Wednesday, 07 May 2008 03:00 |
|
Often in franchising companies a franchisor will spend 80 percent of their time helping 20 percent of their franchises. The allocation of the franchisor’s labor will be disproportionate and in effect on fair to the superstar performing franchise outlets in the franchising system. There are also times when a franchisee will have needs that our way beyond the call of duty and those requirements of the franchisor in the franchising agreement. It is for this reason, especially with our international franchises that I decided to add a clause into our franchise agreements, which protected our cash flow and time management all of our consultants, employees and staff. Below is a copy of the clause that I put into our franchising agreements; 4.4 Advisory Services Franchisor may provide, as and to the extent required in Franchisor’s judgement, a continuing advisory service, which may include consultation on promotional, marketing and advertising techniques and customer relations. Representatives of Franchisor may consult regularly with Franchisee at no cost to the Franchisee. At Franchisee’s request, a representative of Franchisor may visit the Franchised Business at least once each year at a time mutually agreed upon. Field representatives may be available at Franchisee’s request for extraordinary consultation and assistance on a fee basis by appointment only. Franchisor’s current fee for extraordinary assistance is U.S $250 per day, plus all related expenses and may be increased by Franchisor. -- -- --- --- --- --- -- -- It may be necessary for franchisors to address such issues in their franchising agreements, prior to running up against the problem or potential eventuality. It is recommended therefore that every franchising company contact their franchise attorney and discuss this issue. I hope if you are in franchising you can learn from my school hard knocks. Consider this in 2006. "Lance Winslow" - Online Think Tank forum board. If you have innovative thoughts and unique perspectives, come think with Lance; http://www.WorldThinkTank.net/wttbbs/ |
|
|
|
|
<< Start < Prev 1 2 3 4 5 6 7 8 Next > End >>
|
|
Page 1 of 8 |
