Category Archives: business

How To Franchise a Great Business Idea

How To Franchise a Great Business Idea

Deciding to create a franchise is a great way to expand your business because it is an opportunity to get your idea out there without having to assume the risks and come up with the capital on your own. When you franchise a business, the franchisee pays the franchisor a fee up front. This fee generally covers the right to operate a business under the franchise trademark.

The franchisee then invests the capital, hires the employees, and signs the leases. This relieves the franchisor of most of the risk and burden that comes along with starting a business.

However, franchising a business is not the right method of expansion for everyone. You must first determine if your business is “franchisable.” Doing your homework first will save you a lot of time, effort, advertising, and legal fees when another expansion option may have been the better choice.

Things to Consider Before Franchising Your Business

An owner who wants to franchise should have a passion for management and a strong ambition to grow their business. If you are the type of owner that likes to play a more behind-the-scenes role, franchising your business may not be the right decision for you. Once you have decided that you are, you should subject your concept to a careful feasibility study to see if the business you have makes sense as a franchise concept.

Other considerations come into play: is there a large market for my business? Many great business ideas are not suited for a large market. You should determine if your idea is, or could be, a commonly desirable good or service. Furthermore, determine if there is something about your business that is unique so that potential customers are attracted to your product.
Moving Forward with Your Franchise

If you believe that your business idea is both unique and marketable to a large market, you should then determine how difficult it will be to train a franchisee to operate a successful duplicate of your business. If there is a lot of specialized knowledge involved or if your business has had the majority of its success because of relationships that you have built over the years, training could be difficult.

Once you have determined that your business is marketable, and that a franchisee will be able to learn how to run your business fairly easily, you should put yourself in the shoes of a potential franchisee. Will a potential investor see the advantages of investing in your business? Is it a business that can make a profit so your annual royalty fee can be paid? While you may have a marketable business, that does not necessarily mean that you will have a marketable franchise.

Making Your Franchise Marketable

To make your franchise marketable, your business should be profitably operating and have a strong team of employees. These elements are crucial because someone will not want to invest in an untested concept. A potential franchisee should be able to see the value of your business. They should be able to see a business in which will be worth investing their time and capital.
Getting Help with Your Franchise

Once you are convinced franchising does make sense, you should contact a franchise law attorney. A franchise law attorney can help you with the intellectual property protections you’ll need for your franchise. These protections include trademarks, patents, and trade secrets. A franchise law attorney will also help you make sure you comply with Federal Trade Commission (FTC) laws and the franchising laws of the key states in which the franchise would be offered or before you start to sell the franchises.

How To Buy an Existing Franchise

How To Buy an Existing Franchise

Buying a franchise business can be a great investment opportunity. However, as with any investment you make, you must be sure to do thorough research before committing. Before you buy an existing franchise, you should assess your skill-set and financial capabilities. You will also need to determine your investment budget. Furthermore, many franchises require special knowledge, which may be difficult to learn on the job. Some examples of franchise business models that require special skill sets may include franchises for tax preparation, auto repair, or even some types of restaurants.

You should also think about your long-term business goals and the role you want to play in the franchise business, be it active or silent. After you determine your budget and the types of franchises that make sense for you, you may begin seeking out the right franchise opportunity.
Buying an Existing Franchise

There are several ways to begin pursuing a franchise business opportunity. One way to find out about potential franchise opportunities is to visit a franchise expo. This will allow you to investigate many different franchises under one roof. Franchise expos can be found easily through online research. If your interests are limited to specific franchises, these franchises will likely have websites or other outlets that you can refer to in search of more information.
Getting Legal Help with Your Franchise Investment

If you feel like you need more guidance, you may also enlist the help of a franchise lawyer who can help you determine what type of franchise is right for your business goals and budget. They can also help you navigate the paper work involved in completing a franchise agreement. While a lawyer can be a great help, keep in mind that they are paid on commission by franchise owners for each deal they make, so be sure that they have your best interests in mind.

Once you have narrowed your choice of franchises, you should review the Franchise Disclosure Document. The Franchise Disclosure Document is a document that provides you with crucial information about the franchise. The owner of the franchise is required by the Federal Trade Commission (FTC) to provide you with this document at least 14 days before you sign the contract or otherwise finalize the deal. The Franchise Disclosure Document is a good way to investigate a particular franchise, as it includes important information related to the business experience of the franchise owners, the fees, royalties and licenses involved, and a list of former and current franchise operations. You may also find it helpful to consult the list of former or current operations and contact the franchisees themselves to get firsthand feedback about the franchise you are considering.

A franchise attorney is also a great resource for finding a franchise that works for you. A franchise attorney can give you unbiased advice on the franchises that holds your interest. An attorney can also help you review the Franchise Disclosure Document and any other paperwork before you make a final decision.

What is a Franchise Business?

What is a Franchise Business?

A franchise business is a business in which the owners, or “franchisors”, sell the rights to their business logo, name, and model to third party retail outlets, owned by independent, third party operators, called “franchisees”. Franchises are an extremely common way of doing business. In fact, it’s difficult to drive more than a few blocks in most cities without seeing a franchise business. Examples of well-known franchise business models include McDonalds, Subway, UPS, and H & R Block. In the United States, there are franchise business opportunities available across a wide variety of industries.
Investing in a Franchise Business

To invest in a franchise, the franchisee must first pay an initial fee for the rights to the business, training, and the equipment required by that particular franchise. Once the business begins operating, the franchisee will generally pay the franchisor an ongoing royalty payment, either on a monthly, quarterly, or annual basis. This payment is usually calculated as a percentage of the franchise operation’s gross sales.

After the contract has been signed, the franchisee will open a replica of the franchise business, under the direction of the franchisor. The franchisee will not have as much control over the business as he or she would have over their own business model, but may benefit from investing in an already-established, name brand.

Control of the Franchise

Generally, the franchisor will require that the business model stay the same. For example, the franchisor will require the franchisee to use the uniforms, business methods, and signs or logos particular to the business itself. The franchisee should remember that he or she is not just buying the right to sell the franchisor’s product, but is buying the right to use the successful and tested business process.

The franchisee will also usually have to use the same or similar pricing in order to keep the advertising streamlined. For example, if you saw an advertisement for $75 tax preparation from a well-known tax preparation franchise, you would expect to find this deal at the franchise operation closest to you. Aside from using the business model determined by the franchisor, the franchisee will otherwise remain an independent owner of the franchise.

While there are many benefits to investing in an already-successful franchise business model, there are drawbacks as well. As with any investment you make, you should do your research thoroughly before you make any franchise purchasing decisions. If you are considering buying into a franchise, you should contact an experienced franchise attorney for further assistance.