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Are You Looking For a Home Based Franchise? We Look at the Advantages and Disadvantages

With the increasing number of franchise ideas currently on the market the increase in home based franchises is growing as well. There are a great number of franchise for sale options that involve you working from home, these are available from well established businesses to get your franchise started. franchise ideas are no longer just for fast food chains they are now available to set up in you own home.

The challenge to working from home is that there are many factors that you will have to juggle with in order to make their franchise ideas a success. You will have to take a responsible approach to managing your business from your home with new technologies and your business experience. An advantage of purchasing a franchise for sale option that lets you work from home is you will have the backing of the franchisor and all of the experience that comes with them. They will have a successful business model that they have implemented over the years that will help your franchise grow. This will include a dedicated learning program to guide you through the franchise ins and outs and will help your business grow more quickly and effectively.

A popular home based franchise idea is through the Internet. With the Internet so widely available throughout homes in the UK, the option of working from home has been a realistic choice for many people within the Internet industry. The increase in this availability has given many potential franchisors another avenue in which to work. Many franchisors now offer an online training program so that franchisee can learn their sector in the comfort of their own home and at their own pace through the internet. There are quite few options available for franchises based on the Internet such as a support franchises, tutorial franchises and marketing franchises.

Another home based franchise idea maybe a cleaning franchise, many of the current cleaning businesses are run from their own home. If you are interested in this industry it may be worth finding a local cleaning businesses and asking if they have a franchise opportunity available.

There are great advantages of working from home and finding a franchise for sale that offers this option is becoming increasingly easier. You will be able to spend more time with your family, set your own schedule and be your own boss. You may have had business ideas and thoughts in the past but have never gone through with them because of the cost but the opportunity of owning a franchise that has an established business model and a good opportunity for success may be right for you. If you research the different franchise ideas that are out there and try and find an area that either you have worked on in the past or you have sufficient interest in then there is no reason why you shouldn't be successful working in a home based franchise.

Home based franchises can be the future for you, make sure that you set up an infrastructure at home and you find the right franchise idea for you.

The Best Franchise Opportunity - How to Determine It

Deciding to get a franchise is only the first of several major decisions a prospective franchisee will have to make. The next is determining the best franchise opportunity.

The best franchise opportunity is a totality of many factors. These factors are like parts that make up a whole. They work together to achieve a beneficial result.

Foremost of these factors is the prospect's financial capability or ready access to financing since a large amount of money is required for the franchise fee, down payment on the lease, and other expenses. In addition to being financially ready, he should make a complete self-examination to determine his personality and preferences so that he can find the right kind of business that will match his style.

Preferably, the prospect must have conducted his own research and market study before setting up a meeting with the franchisor. This will enable him to inquire intelligently about important details relative to the company and the arrangements under the franchise. This way, he does not enter into something that he does not know much about, wherein he will have to depend mainly on the franchisor for information. This kind of information is unreliable since it has already been edited to come up with a highly convincing franchise presentation.

In asking questions, the prospect must solicit important information such as those about the track record of the company insofar as its franchises are concerned; how committed it is in providing continuous support to the franchise and ensuring its success; how effective its training and marketing programs are; and if the company has an continuing product research and development program to make the business updated and competitive. The franchisor must be able to provide this information to the prospect's satisfaction.

If the business is large and enormously popular in the market, its franchise network is most probably successful. Accordingly, the franchise fee alone will cost the prospect a large sum of money. If he does not possess the financial capability required by large companies, the next best thing is to look for a lesser-known company that has a high market potential but a lower franchise fee. However, the risks involved here are definitely higher than with a large-company franchise.

In considering the franchise offer of a less popular franchisor, the prospect has to conduct a thorough study on the background of the company, its present management, and the market potential of its products or services in his intended business location. He must also be able to find substantiated answers to the following questions: Is the business concept innovative enough to attract customers? Will it draw enough interest in the marketplace to make loyal customers? Is the company willing to allot a reasonable budget to fund marketing programs in the area to help the franchisee realize more profits? Am I willing to risk my money on a novel concept such as this? If so, am I up to the challenge of turning the franchise into a profitable venture? If the answer to all these questions is "yes," the other equally important factors must also be considered.

The planned business site for the franchise unit is another crucial factor if the business is to succeed. Ideally, the business must be established in a place where there is a lot of human traffic, possibly inside a shopping centre, near a school, or downtown where all the shops are situated. It must also be easily accessible to its target market. In this regard, the franchisor's willingness to provide support in pinpointing determining the ideal location and negotiating the lease will be a good indication of his sincerity.

In addition, the prospect has to determine the availability of competent people in the area who can be considered for possible employment in his franchise. Staffing the business with quality employees who can be trained in operations and management will be an essential factor in running the business smoothly.

As the prospective chief operations officer of a franchise unit, the prospect must be assured of an effective training program that will arm him with adequate knowledge in starting the business and running it smoothly later on. A good training program for the employees should also be in place.

Furthermore, local legislations that are favorable to business will make the franchise opportunity more encouraging, assuming, that is, that the general economic condition is good for business.

The best franchise opportunity materializes when the prospective franchisee is financially ready; he has made a thorough study of his chosen company, its viability, products, and franchise network; he is assured of the commitment of the company to provide him continuous support; he has a good business site in mind; and the prevailing economic condition is conducive to starting a business.

The moment this opportunity presents itself, seize it!

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Franchising - 2011 Market

One certain thing about franchising in 2011 will be change. Indeed, successful franchises must change to meet the current market conditions. Business without growth is a stalled venture.

With franchising, change is needed for growth. Franchising is based on methodologies and processes. Businesses need to move forward into the future.

A thriving franchise grows throughout its years of operation. Different delivery methods come on scene and new technology makes an appearance. In addition, the consumer changes over time.

Customer preferences and demands do not stay the same. For example, restaurateurs in the 70s might not have served many customers requesting vegan menus or expecting a variety of international flavors. Franchises must continue adapting to the marketplace. Before choosing a franchise in 2011, potential franchisees should ask franchisors a few vital questions

Choosing a Franchise - 5 Questions for Franchisors

1. What time is devoted in this franchise to developing systems and markets?

Franchisees want to know how much time a franchise allows for research and development purposes.

2. Does the franchisor plan any innovations?

Before people invest in a franchise, they should know if the business is willing to change with the times. Obviously by the nature of franchising, certain elements stay the same in the system. Yet business ventures have to keep up-to-date with the mood and direction of the marketplace.

As well, franchisees should be prepared for the degree of change. Does this franchisor hardly ever make changes or do they modify processes, colors, or flavors on a regular basis? No franchisee can be prepared, however, for everything that lies ahead in a franchise.

Even franchisors have no control over external factors such as the economy or changing governments and different regulations. Yet franchisees should arm themselves with as much information as possible before they buy a franchise. Franchisees must perform 'due diligence' (researching the franchise from every angle).

3. Does the franchise allow franchisees opportunities for creativity?

One basic fact about franchising is that each franchise has systems and processes and franchisees are expected to follow them. Of course, franchisors can allow franchisees to express their individuality. Since buyers will be working within the framework of a franchise, they should be aware about the requirements of a specific business.

Is this franchisor very rigid in their approach? Will the franchisor welcome a franchisee's creative spirit? Potential buyers need to know the score. The franchise has to suit you.

4. Does the franchise have good analytical systems?

The franchise should have a system capable of analyzing the customers and current marketplace - even franchisees. A franchise cannot be effective if its leadership and management are not in touch with the entire business. A trained and friendly staff, as well as customer satisfaction, also plays a huge part in the success of any venture.

5. What is the company's vision?

A franchisee should ask the franchisor about their vision for the company. Franchisees will learn plenty about the business from the answer to that question. Potential buyers can get a better idea about whether or not this franchise is right for them. Keep in mind during 2011 and beyond that there is one 'constant' you can always expect in franchising - constant change.

Franchising Resilience

When the going gets tough, the smart businessman wants to be in franchising. This in essence is the message from the 2012 NatWest bfa franchise survey. Using statistics gathered in respect of the 2011 calendar year, the survey highlights the internal and external factors which have affected the franchising sector during the year, as well as commenting on trends which are evident in key measures. For example, since 2008, the survey has incorporated the impact of the global financial downturn on UK franchises.

Amid a period of general gloom for UK business, it appears that the franchise sector continued to expand. According to the NatWest bfa survey, 2011 saw a net increase of 29 franchisor businesses leading to a 4% increase in franchise units. This increase, taken together with the growth of existing franchise units has resulted in a 14% increase in employee numbers, and an overall contribution to the UK economy of £13.4 billion.

Having said that, franchises are not immune to the general economic conditions and overall business confidence has slipped with only 1 in 5 franchisors and franchisees expecting business to improve in 2012. However, confidence in respect of the robustness of their own franchise business is higher than confidence in respect of the general economy. In fact 47% of franchisees believe that they have a "big competitive advantage" over other comparable small businesses, simply as a result of the brand value attributed to being part of a franchise business.

So what lessons can franchisors draw from the NatWest bfa franchise survey? Interestingly, one of the key reasons why franchises may be holding up so well is the care which franchisors take when appointing new franchisees. The need to ensure that the franchisee both has the necessary capital and will work to promote the brand culture has led to franchisors carrying out extensive recruitment processes. Whereas once all a franchisee needed was the necessary capital, now they need to be able to convince the franchisor that they also have the ability to meet franchise expectations.

In the NatWest bfa Franchise Survey, the majority of franchisors estimated that they weeded out nine out of every ten candidates as being unsuitable. And whilst lack of sufficient capital came top of the list at 71%, worryingly 21% of candidates failed to complete the application form properly and 25% failed to turn up for appointments. The actual recruitment process can take between two and five months from first contact until the signing of the franchise agreement. In the process, in addition to financial reviews, business acumen tests and interviews, many franchisors will also expect candidates to sit a psychometric test.

Once a suitable candidate has been identified, the hard work begins. Robust franchise contracts are needed to cement the relationship and these are best drawn up by a specialist franchise solicitor. The franchisor also needs to take ongoing legal advice on matters such as intellectual property, copyright law and the risk of company identity theft; all areas identified by the NatWest bfa survey as being of prime importance to the ongoing success of the franchise operation.

Also high on the list of learning points is the level of contact which franchisors maintain with franchisees. The NatWest bfa survey revealed that whilst 80% of franchisees are satisfied with the franchise relationship, those who were dissatisfied cited lack of support and lack of communication as the chief reasons. Overall 81% of franchisees are in contact with field support staff once a month, with 47% of new franchisees receiving contact on a weekly basis. For the franchisor there can be a fine line between providing support but letting the franchisee get on with running the business and providing so much support that the franchisor is effectively running the franchise operation in its entirety. Here again a qualified franchise solicitor can help to provide guidance on where the duties of the franchisor end and those of the franchisee begin.

Interestingly, whilst lack of support is cited as one of the main reasons for a breakdown of the franchisor/franchisee relationship, only 8% of franchisees list the support package as one of the key benefits of being a franchisee. For franchisees, competitive advantage, having a standardised product/service and appearing to be part of a larger organisation all stand out as key benefits. Franchisors agree although they do place more importance on the provision of back up with 27% considering this to be one of the key benefits.

When looking at the results of surveys such as these, we have to remember that results can vary widely between sectors. For example, 48% of franchised retail stores have turnover in excess of £500,000, compared to just 12% of business and commercial service franchises. One statistic which is clear though is the way in which franchises have spread. In 1984 franchises were concentrated within London and the Home Counties with 44% of all franchises in that region. Now the figure is closer to 33% with 31% of UK franchisors also awarding licences outside of the UK.

Overall the NatWest bfa franchise survey returns a positive impression of the state of franchising within the UK. The survey notes that in common with the previous recession in the early 1990s "There has been little evidence of widespread business failure and few signs of the business model breaking down."

The Power of Franchises - Advantages of Franchising

While some entrepreneurs might decide to start their own business there are others who are looking for an already established business model that they can use and hopefully profit from. This is the world of franchising and many people see franchising as a shortcut to success. This is somewhat true as the success rate of franchises is higher than that of someone starting their own business. As with most things in life there are certain advantages and disadvantages, in this article I will discuss some of the advantages of franchising.

Advantages of Buying a Franchise

  • Buying Power - Franchise companies have buying power and this can be seen as a direct advantage and this will also give you an advantage over your competitors and other businesses that do not have this buying power. The reason why franchises have buying power is because they will purchase their raw materials from certain suppliers and these suppliers will offer the franchise companies an exclusive discount, and due to the fact that they will buy large quantities of the products. All franchise owners will benefit because it will mean that you will save money, which in the long run equals more profit.

  • Lower Failure Rate - Franchises have a lower failure rate than when compared to other business that are started. The reason for this is because when you buy a franchise you are actually buying into an established and already successful concept. Business success statistics show that franchisees (person who opens a franchise) stand a much better chance compared to people who start independent businesses. The shocking statistics show that independent businesses stand a 70 to 80 percent chance of failing to surviving the first few critical years. On the other hand franchisees have an 80 percent chance of surviving and being able to survive.

  • Brand Recognition and Advertising - Most franchises especially in the fast food industry and well known and most well-known franchises have national brand recognition. The franchise companies also spend huge sums of money on advertising campaigns and these advertising campaigns are ultimately advertising your franchise as well. This is where it is shown that once again buying a franchise can be like buying a business with an already established and loyal customer base.

  • Training, Support and Help with the start up and running of the franchise - You as the franchisee will receive management training and continuous support from the franchise that you decide to invest in. You will essentially get just about everything you need including all the equipment, employees, suppliers and instruction or training needed to start the business. This is one of the reasons why franchises have such a high success rate, it's due to the support and on going help from the franchise companies. You and your franchise will benefit and succeed due to the help and support that the franchise companies provide.

I hope this helps you in making a decision if franchising is the right option for you. The advantages of a franchise are amazing and this is why many people decide to invest and open a franchise. The power of being able to invest and have your slice of a successful and already established business model is very tempting, the power of franchising is amazing.

Children's Franchises - Many Choices

Children's franchises are similar to children's futures. They are limitless and full of possibilities. A child franchise is different from other niche franchises such as restaurants and financial services. With a restaurant franchise, for example, a franchisee must focus on catering to a large and diverse customer base.

A children's franchise in contrast is a niche franchise. Regardless of the specific business, a franchisee must focus on specific customers (i.e. children and/ or parents). Thus, the area a franchisee or individual investing in a child business wants to pursue depends on his or her interest. If daycare is a franchisee's interest then he or she can choose from the many daycare opportunities available.

Enjoying Being around Children

The kid franchise category provides a variety of opportunities to work with children. Whether it's helping them with after school projects or helping with homework, there are business opportunities to help meet children's needs. A health entrepreneur, for instance, can invest in a fitness opportunity that only caters to children.

A potential franchisee interested in taking care of children can own and operate a franchise daycare. He or she can also invest in learning center franchises. The franchise doesn't have to be a general learning center, but can focus on math such as Mathnasium Learning Centers, science or child development.

For a franchise who wants to teach a specific age group, there are franchise opportunities available. These franchises include opportunities such as Sunbrook Academy. The Academy is a preschool which caters to children ranging from infants to pre-school aged children.

With children's franchises there are always opportunities to pursue to help children that are based on a franchisee's interest and/ or work experience.

Helping Children Indirectly

Franchisees who want to help children without putting in the hard work in for taking care of them have many opportunities too. For example, an individual interested in helping busy parents can invest in a franchise helping plan birthday parties and special events. Children franchises are also available in finance. Parents want to make sure that children's educational and future expenses are taken care of before they reach adulthood. A financial related children franchise is a way to make that happen.

Investing in a Franchise Catering to Children

All franchises require some kind initial investment. The investment is similar to a down payment on a home. A franchisee may have to pay additional capital to start his or her child franchise. The initial investment depends on several factors, including the specific franchise. For instance, the Sunbrook Academy's minimum investment starts at $150,000. However, Mathnasium Learning Centers' minimum investment is approximately $66,600.

Picking the Right Children's Franchise

Before investing in any of the children franchises, entrepreneurs should consider important things such as personal business goals and finances. He or she shouldn't pick a franchise solely based on money or what franchisors say. Instead entrepreneurs should compile a list of franchises they are interested and conduct research. For instance, find out if the franchises offer financing or detailed training.

Franchisee, Franchisor And Franchise

A franchisee buys a franchise sometimes from the franchisor and sometimes from another franchisee. An established franchisor may not offer you as good of terms in a way of royalty payments and franchise fees. Terms are also depending on supply and demand.

If you consider to become a franchisee it is important to know as much as possible about the laws and regulations. If, for example, the franchising company is in another state and selling you a franchise in a different state, then the franchise regulations in this state where the franchisor is will not help you.

There are websites that carry detailed information on companies willing to offer a franchise to business professionals. If you are interested in a franchise you should gather enough information regarding the business you would like to franchise now or in the future, then the following information could very well save you from complete and utter financial ruin. The internet is often the first place to start looking for information. Information on franchise education programs such as the IFA's, International Franchise Associations, are recommended for everyone that seek quality information.

Any business entrepreneur would love a franchise that is capable of braving all the market trends. If a business is constantly getting affected by the market fluctuation, its franchise will bear the brunt as well. It is often said that in franchising it is all about winning markets and market shares and standing tall on that brand you are building.

In our history we have had in our mobile car wash industry one-man operations that may work in multiple cities. It appears that consumers have grown wise to the so-called multi-level-marketing business opportunity sales tactics. Therefore that form of business model has hijacked a new host, the franchise industry model, and modified its definition. If the Federal Trade Commission is going to decide, that is fine and will continue to serve our nation as it was intended. Changing the rules half way through the franchise game is probably hurting the industry more than helping it.

Normally an automatic renewal of the franchise agreement take place. That means, as long as you do not notify the franchisor that you plan on terminating the contract in advance of the end of the term in writing then it automatically renews and thus you go for another term and at that point are responsible for signing the then current franchise agreement for the next term or future period.

Many persons who opt to open a circuit-training franchise find that the franchise agreement does not grant them the liberty to add amenities as they wish. With contracts which refer everything back to the confidential operations manual, which many times the franchisee has not yet seen at the time of the agreement are vague. The more that is spelled out in advance in the actual agreement is better for the franchisee.

What opportunities are there?

Entrepreneurs working with senior care franchises are the lucky few that will be able to reap the benefits of the huge upswing in population. They will be a part of the top franchise opportunities market since fast food. It is really a multitude of franchise opportunities out there so how does an entrepreneur choose among them. One obvious way is a franchise directory where you will find a list of small business opportunities and franchise organizations. There you will also find helpful articles, press releases, forms and guides, all designed to make your search for a franchise opportunity as straightforward as possible.

Why People Franchise

Philippine Franchise Association (PFA), cites franchising as the fastest method for business expansion. He must know where he is and where he wants to see himself in the future, and how he will go about it. The Philippines is considered the franchising hub of Asia, where franchising has experienced phenomenal growth in the past decades. Of the entire franchising sector, food brands make up 41 percent, service establishments 32 percent, and retail outlets 27 percent. In the Philippines, where over 45 percent of retail sales in shopping centers are from franchised enterprises, franchising contributes $6 billion or five percent of the Philippine GDP and provides employment for one million Filipinos. There is already a system in place, and all a franchisee must do is to follow that system - no more hit and miss. The franchisor can do this on his own if he is qualified enough, or consult with franchise experts at the Philippine Franchise Association. Franchising, a proven business model with a 90 percent success rate, makes use of other people's money, time and organization, allowing for rapid expansion.

We have posted this topic before but we want to add something up about the advantages of Philippine Franchise and also give some seminar and conference schedules that you can attend if you want to get into franchising in the Philippines. Comparing franchising to a marriage, Limjoco emphasizes the importance of screening potential franchisees thoroughly: "Franchising must be done with the right partner; it should stay in business for the longest time. Simply speaking, franchising works because it duplicates an already successful business," states Limjoco. From only about 50 brands in the 1980s, there are now 1,000 brands franchised in the Philippines (68 percent of them homegrown concepts), in five principal franchise sectors: fastfood; retail clothing; cafes, confectioneries and bakeshops; hospitality and wellness; and food carts. To set up a franchise, the potential franchisor must undergo a franchise development process that will define the franchise structure. Alegria "Bing" Sibal-Limjoco, CFE (uFranchise Sales and Mgt. All business endeavors must also be registered at the Department of Trade and Industry (DTI) for single proprietorship and at the Securities and Exchange Commission (SEC) for corporations.

Your product or service must stand out; there must be something unique about the idea you are franchising and you must look for your niche," notes Limjoco. For those considering franchising, it is recommended that the business must have been running for at least a year already, to be able to have a benchmark for future franchises. The franchisor must have a solid business plan," Limjoco adds. While there is no mandatory registration exclusive for franchising, it is important to get a trademark for your idea at the Intellectual Property Office to claim ownership of your brand," advises Limjoco. And of course, the concept must be profitable - that is the bottomline of business. The potential franchisor can then lay down the franchise agreement, develop the franchise operations manual, and then begin franchise marketing and sales, either through a franchise broker or their own department. With the prime mover advantage, a franchise brand can penetrate and saturate the market faster, easily attaining market leader status.

Franchise Development Formats and Agreements For the Franchisee

Development formats and agreements in franchising can be divided into two broad categories: Single-unit franchising and Multi-unit franchising

Single-unit franchising: an arrangement by which the franchisor licenses the franchisee to operate the business from a single outlet. Single-unit franchising is the most common form of franchise and gives the franchisor the greatest degree of flexibility and control over the franchise system.

Multi-unit franchising: an arrangement by which the franchisor licenses the franchisee to operate the business through multiple single-unit outlets based on a development schedule. Multi-unit franchising is becoming more common as it maximizes the franchisee's profit potential and allows the franchisor to expand the brand in a specific territory. Successful franchisees often look to buy more than one franchise unit from the same franchisor.

A multi-unit franchisee may pay an up-front franchise fee (at a discounted rate) for each franchise unit that they will open. In a multi-unit franchise (sometimes called an area development franchise or simply an area franchise), the franchisor and the franchisee sign an area-development agreement that dictates the timing of unit development and openings by the franchisee. They also sign a separate unit-franchise agreement, which governs the operation of each outlet that the franchisee opens in his or her area.

Multi-level franchising

Master franchise/Sub-franchise: as franchisors want to expand into new regions, or even internationally, they often choose to use some form of multi-level franchising.

Although there are several variations on multi-level franchising, master franchisees, also known as sub-franchisors, have the right to grant unit franchises to third parties.

Multi-level franchising strategies are generally motivated by geographical factors. Having a master franchisee on the ground and close to third party franchisees mean they can communicate face-to-face with them more frequently. It also means the master franchisee is well acquainted with the competitive forces at play in the local market.

What's right for you?

A franchise systems maturity, geographical base and type of product or service all have an impact on how the system will evolve and grow over time.

The sheer diversity of franchising - the wide range of concepts and differing strategies for expansion and development formats - ensure that franchising will continue to provide new business opportunities well into the future.

Join a Real Estate Franchise Or Remain Independent

Franchising is here to stay. The benefits stemming from joining a franchise are many: affiliation with a larger organization; greater market power from a recognized trademark; cooperative advertising and marketing. By contrast, independent business owners are known only to their local area, are not associated with a larger group, and do not benefit from the economies of scale from cooperative marketing efforts.

Joining a franchise, however, does entail some risks. Depending on the franchise, start-up costs resulting from initial franchise fees and conversion can be costly. Most franchise systems also require on-going payments as a percentage of gross revenues received - called royalties. These fees can vary depending on the franchise and are usually around six or eight percent. Some traditional franchises also require monthly flat fees or transaction fees. Franchise companies audit their franchisees to monitor fee payments. The prospective franchisee must consider all these costs and determine whether the franchise route is the way to go.

Franchising in the real estate industry has been around for many years. Franchisers such as Century 21, Coldwell Banker and Prudential, to name a few. These are traditional companies that have maintained the operation of the franchise as when first proposed the concept. Mainly, pay an initial franchise fee to join the system and pay a royalty to the franchise company on an on-going basis. In return, you run your business under our brand-name.

The real estate industry has changed and the needs of real estate brokers are also changing. Real estate brokers who are seeking franchise affiliation have other, more current franchise methods available to suit their needs. There are now franchise companies that offer a "no frills" approach to franchise affiliation. Since real estate is a service-oriented profession, with no actual product being sold, such as hamburger or gasoline, these new systems are offering a brand-name, and therefore the franchisee is gaining the benefit of being a member of a larger group.

This "no-frills" approach is getting the interest of many veteran brokers for the fact that they are gaining greater market recognition without the burden of paying royalties. Many services that were available through the traditional franchises, such as sales training, are offered by outside training schools and organizations, available at the brokers' discretion. And the success of the real estate office is mostly due to the experience and management of the broker, not the franchise. It is for this reason that no franchise company will guarantee success by joining their franchise system.

As the real estate profession develops, so is way franchising is changing. Some may still opt for the traditional franchise methods; however, a growing and ever-increasing number of independent-minded brokers are now realizing that joining a network will increase their market recognition and, instead, are opting for the more current methods of franchise affiliation, without the burden of higher cost.

Understanding Your Franchisers for Better Work From Home Opportunities

Franchising is really popular nowadays. Among the various work from home opportunities that are currently in the market, a lot of people go for franchising. This is because of the many benefits that franchising provides in terms of supplies, operational equipment, and branding strategies. Truly, owning a franchise is a better option than having to start your own business from scratch.

However, there are several factors you have to consider when buying a franchise. One of these factors includes getting to know who your franchisers are. This is essential because, needless to say, the franchisers would be the ones to decide whether or not you can buy the franchise. You would also be working closely with them even after you have bought the franchise because there are agreements that enable franchisers to monitor the progress of the ventures. Therefore, you have to get to know them pretty well. For you to be able to do that here are some questions you may want to ask:

1. What are the franchisers providing you and at what cost? Definitely, if you are getting into a business deal you have to consider what you would be getting from it. If the deal is for a franchise, then you should know what your franchisers are willing to provide you and at what cost. Are they providing you all the necessary tools and equipment as well as the supplies you would need to operate your franchise? Are you getting all of the provisions paid under the price deal you have agreed upon? Are there other materials that the franchisers would provide but for which you would have to pay extra?

Knowing the full extent of franchiser's support you are getting is essential. This is not only for you to know what you are getting the franchise with. This would also give you an impression of the kind of franchiser you are dealing with. There are franchisers who are willing to support their franchisees both in terms of educating them in the processes involved and providing them with what they need. These are the franchisers you should make a deal with because they are the ones that you can turn to whenever you need help in running work from home opportunities.

2. What do the franchisers expect from the deal? Aside from knowing what they can give, you also have to consider what the franchisers expect from you. Do they expect you to utilize your own business strategies? Are you expected to hire additional manpower as you deem fit for the operations of the franchise? Do they expect you to run the franchise on a trial period first before giving you all the rights to the brand? These are only a few of the expectations franchisers can have of their aspiring franchisees. There are also franchisers who expect their franchisees to uphold the brand's reputation and the company's visionary statements. They may be little things if you compare them to the greater scale in which the franchise operates but they can account for how well a working relationship you can foster with your franchiser.

3. How do the franchisers operate on their side of the business? If you franchise a business, you are expected to run it on your own terms. Sometimes, you are also given the reigns to organize your own marketing campaigns. But even if this is the case, knowing how the franchisers run their own business would also help. Remember that you are upholding a brand and a reputation so people have to see some consistency. You may also note that members of your target market can very well chance upon another franchise in a different location. They can tell whether your franchise is different from the others. This can be positive if they would think that yours has a better way of doing things but not pushing it would definitely be more beneficial for you.

So much is definitely dependent on the type of franchisers you would work with. Thus, you have to take the time to research about them, talk to them, and understand their perspectives. This would be very helpful in all the work from home opportunities that you decide to take on.

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How to Choose a Good Franchise Broker

If you are thinking of becoming a franchisee you are starting in a good path. It can be very exciting to start your own franchise but you will also have to comply with the franchisor and make hard decisions. The franchise contract is an important factor in your franchising career. It will stipulate what you can and cannot do on certain things and what the franchisor is going to do for you or not do. That contract can sometimes be just a little tricky to read or completely bogus. You will want to make sure that you understand the contract completely before signing it. There are many legitimate franchise opportunities out there but there are also a few franchising scams. You may want to find a good franchise broker to help you through your choice of becoming a franchisee.

A good franchise broker can help you determine if the franchise contract is legitimate. They can also ensure that what was verbally agreed to you from the franchisor is the in the written contract. You should never just take someone's word. They can also help you negotiate the franchise contract if you feel that something is not in your favor or you disagree with. A good experienced franchise broker should be able to spot a bad contract for you, so you don't get roped into something you thought was something totally different.

It is essential that you choose a franchise that is something that fits for you personally and financially. Your broker should be able to help you by presenting many different franchises for you. You want a franchise broker who is able to show and explain as many as possible, not one who only offers you three and gets mad if you don't like them.

You need to find a broker who is supportive of you decision in franchising and who is willing to help you achieve your goals. If they are trying to deter you from franchising and get into a different business opportunity then you need to find a new one. A good broker will not conduct themselves that way. Usually it is a way for that broker to make money quick and sadly you won't be left with anything.

A good franchise broker will take into consideration that buying a franchise is a big decision. It is not a decision that you should be rushed or pushed into. If you want to take your time and weigh all the options, he or she should respect that. A good franchise broker will not put pressure on you to buy right away; they will allow you the time you need to make a good decision.

One of the biggest things to look for in a good franchise broker is if they know about franchising. You will want to find someone who is very knowledgeable in franchising. This franchise broker should be able to answer all the questions you have about franchising. If you know more than they do, what is the need for them in the first place? If they are not helping you, you should find a new franchise broker.

There are good ones and bad ones; you just have to find the good franchise brokers.

How to Investigate the Franchise Company You're Going to Buy

The key to success in owning a franchise is finding a franchise that is not only reputable and honest, but is also the "right" fit for you. You need to do a thorough investigation of the franchise your going to buy, while at the same time they should be evaluating you to be sure you are a good fit for them.

Remember, we discussed in the previous articles how the franchise has to fit your goals, financial situation, personality, and management style, and so on. And, there has to be a demand for its products or services in your market. The right franchise should also have a proven established business system, which means that the franchisor should have a history of successful franchisees. You should ONLY consider franchise companies that have very few failures or closures, low franchisee turnover rates, and a good reputation with its franchisees.

How can you tell if a franchise company is sound, honest, and reputable? The best way do this once you have narrowed down your search to no more than two to three franchises is to make arrangements to speak with the company representatives, and also to call the current and former franchisees listed in the Uniform Franchise Offering Circular (UFOC).

Ask them detailed questions about:

  • site selection and development
  • initial training
  • pre-opening and opening support
  • how well the franchisor works with the franchisees
  • what kind of ongoing training and support do they offer
  • ask about how quickly they respond to franchisee questions and concerns
  • how effective are their marketing and advertising programs
  • are there any indications of financial difficulties within the franchise

Once you have completed this research and after speaking with franchisees, you feel confident that the franchisor provides the kind of training and ongoing support that you need, and that the franchisor/franchisee relations are good, you're ready to take the four final steps toward becoming a franchise owner.

1. Visit the franchisors corporate headquarter: Meet the senior executives of at least two franchises. To determine whether you are compatible and have common values and goals, it's best to meet the executives face to face. Most franchises have what they call "Discovery Days," where serious candidates fly out to company headquarters to spend an entire day with the senior management team and support staff

2. Go to work in the franchise: The only way to really know whether a particular franchise is a good fit for you is to work in it. Some franchisors, in fact, require that potential franchisees work in the franchise before completing the franchise agreement. Most franchisors have programs that enable you to work in their franchise for a limited time to see if it's a good fit. An opportunity that sounds great on paper may seem a lot different when you actually do the job.

3. Along with your qualified franchise attorney negotiate your contract: The franchise agreement is the actual contract you sign when you buy a franchise. A generic franchise agreement is generally sent with the UFOC and is attached as part of Item 22 in the back of the UFOC. It differs from the UFOC because the UFOC is not an actual contract; it is only a document that discloses information. The franchise agreement is a contract you and the franchisor sign, and it becomes legally binding on both parties.

All the information regarding company policy your rights and responsibilities, and the rights and responsibilities of the franchisor should be the same in the UFOC as in the franchise agreement. But the franchise agreement is not an exact duplicate of the UFOC. Because the UFOC is a disclosure document, it actually contains more information than the franchise agreement. For example, the list of franchisees, the litigation history of the franchise, the business experience of the company officers, and any earnings claims appear in the UFOC, but not in the franchise agreement. If the franchise agreement is not attached to the UFOC, contact the franchisor and ask them to send the agreement to you.

4. Sign the franchise agreement: Federal law states that you must have the UFOC for at least 10 days and the franchise agreement for at least 5 days before signing it. There is every good reason for this waiting, or "cooling off" period. It gives you a chance to make sure that the verbal promises and claims made to you by company representatives are the same as the claims and promises made in the UFOC and franchise agreement.

Use the time you have to make sure there are no discrepancies between your rights and responsibilities as described in the UFOC and as described in the franchise agreement. Have an experienced franchise attorney and a trusted accountant review both documents for you. They will help you make the right choice. A little money spent up front getting good advice from experienced professionals can potentially save you a lot of money and trouble in the years ahead.

In negotiating your franchise agreement, make sure the document leaves nothing out, and get it all in writing. While you have no guarantees that your franchise will live up to your expectations, your contract can help protect your from the risks involved in being a franchisee.

The 5 and 10 day waiting periods are minimum times the law states you must have these documents before signing. But take as long as you need to feel comfortable with the contract before signing. Don't feel pressured to sign before you are ready whether that's 10 days or 2 months after receiving the contract. Maybe, it's just not the right time for you to get into a franchise. And that's OK too.

Buying a franchise MUST NOT BE AN EMOTIONAL decision. Don't let your emotions can get in the way of making a smart rational decision. You MUST take disciplined action steps to perform an objective evaluation of the chosen franchise your going to buy.

Part 5 of 5 from A Proven Method to Determine the Best Franchise For You.

7 Points of Advice When Buying an Existing Franchise

When buyers choose to purchase an existing franchise they can enjoy the benefits of regional or national recognition as well as a history of revenues and profits from the location. Buying an existing franchise is somewhat different than buying any other type of business because you are essentially purchasing the business from the seller (franchisee) and the rights to the franchise from the franchisor (company that owns the franchise.) Here are a few suggestions on things you should do before and after the closing:

1. Have a qualified franchise attorney review the Franchise Disclosure Document (FDD) - This should be the very first piece of due diligence you seek. The franchise agreement signed by the previous owners may not be the same agreement you will be subject to perform by. Attorneys are best used as "preventative medicine." They become very expensive and the legal process is very slow when you use an attorney to help you after the problems have arisen. You should seek out an attorney that has experience with franchise issues. Your acquisition may be subject to transfer fees, back royalties, or the franchise may have first right or refusal to buy the business.

2. Have a firm understanding of all franchise related fees - Franchises have several fees that they charge. Franchises will frequently charge an upfront or initial fee as well as a transfer fee. Other fees may include a flat rental fee and/or a royalty based on the gross sales or gross profits. There are also a whole group of other fees the franchise may charge and you need to be aware of when and how the franchise fees are paid, what these fees go to, and what happens if you are slow or don't pay a fee.

3. Compose a new marketing plan and submit it to corporate BEFORE closing - Several business buyers are seeking existing franchises that they can fix up and turn around to make more successful. I recently heard of one story where a seller told the buyer that all they needed to do was increase sales, and the seller even defined a plan of attack on behalf of the new buyer to increase sales. Regretfully the seller did not get his marketing and sale strategy approved by the franchisor. Consequently the new business owner failed because the franchisor was not helpful on turning around the business. By submitting a new marketing plan to the franchisor before you finish the acquisition you will know whether or not the franchisor is supportive to you.

4. Contact several other franchise owners with similar demographics - This is so basic but very few franchise buyers do this! You need to contact several franchisees and discuss your business plan with them to increase or sustain sales. I recently heard of a franchisor that has started three (3) franchises that have all gone bankrupt!

5. Avoid existing franchises with higher than a 5% failure rate or a 10% transfer rate - In my opinion this is a big reason to run, not walk away from a franchise! When you buy a franchise you are buying a proven business model. If the model isn't working - don't buy it.

6. Avoid buy new franchises - I recently had a franchise salesman contact me with a really neat franchise idea or concept. I listened to the franchise pitch, he explained that there was an existing store that had been opened for almost two years and the flagship store had been very successful. He explained that as the new franchise was being rolled out they were offering a discounted franchise fee for the first few people who signed up for the business. I seriously considered investing in this franchise, and such as all business decisions I called my long term friend and advisor. He pointed out to me that you buy a franchise because it is a proven business model. If the franchise hasn't been in existence for awhile, it's not a proven business model.

7. Consult your franchise attorney (again!)- Franchise attorneys are great resources. They understand that with certain franchisors terms can be negotiated. However there are established franchisors that will not budge on terms of the franchise agreement.

How Much Are You Losing by Not Franchising Your Business? 6 Factors You Must Consider

We've seen numerous articles through the years about what it costs to franchise your business, but I suggest you think about it another way:

What's it cost you not to franchise your business?

Loss is greater than the cost

The cost to franchise a business varies greatly, from less than $40,000 to more than $150,000, and whether you spend a little or a lot, that amount pales in comparison to what you may lose by not franchising your business.

Before I get ahead of myself, however, and lest you believe that my only purpose in writing this article is to convince you to franchise your business, let me add these caveats:

  1. Franchising is not for every business, and that's okay. Some businesses cannot be franchised. Other businesses should not be franchised. The business that loses is the one that should franchise and doesn't.
  2. The initial fee to franchise a business is only the beginning of your investment. Don't be misled. The initial fee usually covers the following: franchise documents, marketing plan, operations manual, sales materials ... but it doesn't come with a network of fee-paying franchisees! You will continue to invest in your business to cultivate a profitable network of franchisees. (By the way, I think your initial cost should be in the range of $100,000. Anything less and I'd question the quality of the product. Anything more and you're probably paying too much).
  3. Franchising is probably not what you do now. It's a business discipline of its own. You may be the world's greatest manufacturer or representative of your product or service, but that's not franchising. You'll have to learn how to be a franchisor, and that's not included in your initial development fee. Are you ready to quit what you're doing (or do less of it) to learn how to be a franchiser?

The cost not to franchise

Those points out of the way, and assuming you're still with me, here's what it costs you not to franchise your business:

  1. Systemization. Profitable businesses revolve around systems. Marketing, sales, operations--these functions must be systematized to succeed in business. However, most businesses aren't systematized, which is a primary reason for business failure. Michael Gerber's best-selling book, The E-Myth, explains why. Franchising a business forces you to systematize--to create a series of systems that operate the business. A franchiser needs systems for finding, training, and supporting franchisees; for showing franchisees how to market and sell; and to teach franchisees how to operate the business in all kinds of situations. In franchising, everything revolves around systems! Along with brand identity, that's mostly what the franchisee buys--the systems. No systems equals no franchise. No systems equals under-performing business. By systematizing you can maximize the profit-potential of your business. How much are you losing by not having systems?
  2. Market Penetration. Unless you're in a small town, it's difficult to penetrate a market when you own and operate the only unit of its kind. Imagine owning one of anything in Boston, Chicago, Los Angeles, Dallas. Even if you're "the best," you won't penetrate the market. Your business may prosper, you may even generate plenty of money, but you'll also create a market for competition. And what if the competition franchises? You may recall that "the best" businesses of their kind years ago were mom-and-pop operations. Pizza. Burgers. The butcher. The auto mechanic. And what happened to them when the franchises moved into town? They were replaced and the market now belongs to the franchises. Even among franchises there's a constant battle for market penetration. If your business doesn't grab a chunk of it, how much are you losing?
  3. Brand Awareness. Customers everywhere love familiarity. So much so, in fact, that when foreigners come to the USA to study or vacation, they sometimes take home a franchise concept! They become the master licensee for that concept in their country. Consumers move geographically, but they remain faithful to brands! If your brand is a single unit on the east side of town, how much awareness are you capturing? Low brand awareness equals lower business value. So when you eventually sell your business, what will you have lost if you haven't scored brand awareness? Because of their advertising campaigns, franchises have a way of making consumers believe they are "everywhere." And even if they're not, it's the brand awareness that counts. How much are you losing to brand awareness?
  4. Revenue Generation. Systems, market penetration and branding all result in greater revenues for a business. And while greater revenues don't always result in greater profits, they do if the business is operated smartly. The cumulative sales of a franchise network will almost always out-perform even the best-operated solo unit. This is a case where more usually is better! Imagine how much revenue you could generate if you received a few percentage points (i.e. a 5% royalty) on every sale made by a member of your network--any where in the world! How much are you losing by limiting your revenue generation to one--or even several--units of your business?
  5. Internationalization. As a solo operator, or even the operator of a several units, your concern is what's happening in your town or city--maybe even just your neighborhood. You don't care about what's happening in the next state, and certainly not another country. Your brand awareness, market penetration and revenues--all your efforts--are focused on your narrow interests. Assuming that people in Germany and Australia and China will buy your products and services, you're obviously missing those opportunities because you're confined to one small part of the world. How much more value would an international network add to your business?
  6. Peopleization. I know it's not a word, but it should be! You may have thought, "I'm only one person. Even if I recruit my family and friends, I won't have enough people to open units around the world. And besides that, I don't have the money!" That's why companies choose franchising as their method of distribution. If the company can't open and operate all the units--and most can't, or don't want to--"peopleization" is the answer. Use other peoples' money and talents to expand your business. That's franchising! How much are you losing by not bringing more people into your business?

Add up your losses

So while most people are concerned about the cost of franchising a business, so what if it costs you $150,000--even $250,000--to franchise your business? What's it worth to you to multiply one unit into 20, 200, 2,000, maybe 20,000 or more units? And sell your products and services to the world's marketplace, while using other peoples money and talents?

Add it up, and that's what you're losing by not franchising your business.

How to Find a Franchise Opportunity

As a franchise sales consultant I am often asked what is the best way to start the initial process of researching and finding the right franchise business to buy. Most of these individuals are still in the initial stages of thinking about buying a franchise, and don't necessarily have a strong opinion either way about what type of opportunity they are looking for. My answer is that there are more resources available in today's market then at anytime to find and research franchise opportunities. Below is a list of some of the most popular methods prospective franchise buyers can use to help narrow the search process and find the franchise business that's right for them.

Internet Directories:

The fastest and most convenient way to begin the process of finding a franchise is via the Internet. There are now dozens of franchise opportunities directories online today that offer comprehensive listings of franchises for sale, including information about investment levels, training, availability, and how to contact the franchise company for more details. These directories are also a good source for free information about the general process of buying a franchise business.

Franchise Industry Publications:

Trade publications are another good source for general information about franchises available and franchising industry news. There are magazines available such as Franchise Times and Entrepreneur, as well as multiple online venues such as franchise-chat.com and franchisenewscenter.com that provide a wealth of free information about finding and buying a franchise.

Trade Shows & Conventions:

There are numerous franchise opportunity trade shows and conventions held through out the year and around the world. These venues offer the chance for individuals to discover and research new opportunities, as well as the unique opportunity to meet actual representatives of franchise companies they may have an interest in. Some of the more popular shows include the National Franchise & Business Opportunities Show, and International Franchise Expo.

Franchise Consultants & Brokers:

Franchise Consultants and brokers work with as little as a few to dozens of different franchise concepts in their database that they generally have in depth knowledge about. Considering the thousands of different franchise opportunities that buyers can choose from these days, they can be effective in helping a prospective buyer narrow their search by first qualifying them, and then showing them opportunities that could be a potential good match. Since the majority of these consultants are paid a referral fee or success fee by the franchisors if one of buyers they introduce moves forward, the buyer generally has no direct expense associated in engaging a franchise consultant to help them.

Some of the potential negatives to working with a franchise consultant can include that some only represent a few or a limited menu of franchise concepts which can potentially limit the prospective buyer's exposure to seeing all the opportunities available in the market. And like some sales people who work on commission, the motivations of the consultant may some times not be entirely consistent with the prospective buyer's best interest or goals. But I would say overall, that the franchise consultant industry has a very good reputation for treating their clients fairly and professionally.

Small Business Brokers:

Many professional business brokers are also franchise consultants, and they also can be an excellent source to find existing or established franchise business for sale in your local area if you decide to go that route. Business brokers generally also have good working knowledge of how franchising works, and can often be very helpful to a prospective buyer because of their inside knowledge of the local small business market. You can find a local Business Brokers in your are by visiting a broker directory on line.

Hit The Streets:

Another good and obvious way to find a research a potential franchise opportunity is to scope out and visit existing franchise businesses in your local area. There is no better validation that a franchise opportunity concept works than seeing a busy store or restaurant full of customers. And if they are available and have the time, you may also want to ask the owner about how business is going, are they happy with the franchisor, and would they recommend this opportunity.

Franchise Sales

How do all of these franchise organizations manage their franchise sales process? It is remarkable how many franchise systems out there, in the United States a new franchise is opened every 8 minutes of each business day, that is an amazing rate of growth! So franchising works, I get it. How do you find franchisees once you have gone through this process of franchising a business though?

When evaluating franchise sales, it is critical to first identify who the franchise buyer is and who we are working to sell the franchises to. Franchise sales encompass a large array of different types of franchise offerings. The traditional franchise is the owner operator model where typically a moderately well capitalized individual buys into the rights to run and manage a single location of the franchise offering. This franchise sales approach is most effective when using a sales presentation that evokes an emotional response. For example, "Be in charge of your own financial future, become the captain of your OWN ship!" Presenting the franchise to the buyer is not about the financial details, the minutia of the business offering or other particulars, it becomes an emotional decision for the buyer to get into business on their own with your help. Franchise sales is about creating that emotional connection with the buyer, similar to the process of selling a home, the buyer falls in love with the idea and the notion that they will be in that house, neighborhood, they picture their family being raised in that home and envision the future they will have there. The individual franchise buyer is typically not a former executive or highly educated individual with millions to invest, it typically is just someone who wants to get into business for themselves and they know they need someone's help doing it.

The franchise sales process is typically a 30-120 day process with a potential candidate, some take much longer. The evaluation process takes place on both sides, the buyer judging whether the franchisor has the support, training and overall package to truly support them and the franchise sales person gauging whether the franchise buyer has the capital, experience and wherewithal to be a franchisee.

The second type of franchise sales is to sell to a multi-unit franchise owner. This franchise offering is someone who has much more capital and experience. In this franchise sale, the buyer purchases the franchise rights to a much larger territory with a larger responsibility. They then are put on a performance schedule by the franchisor who establishes how many units the multi unit franchisee will be opening. This franchise sale is a different sale than the individual franchise. This buyer is highly sophisticated and has most likely been in franchise development before. They look over the financials and make an investment decision based on the ROI and how quickly they will see a return on the investment. In order to make this franchise sale the franchise system probably needs to be somewhat mature and have a really professional package to offer the franchisee, they are typically being courted by many franchise systems. The offering needs to make sense, in many cases the only realistic way to attract this buyer is to present earnings claims and business plans, these people are making an investment when they buy into the franchise, not buying into a lifestyle.

When approaching the process of franchise sales, it is critical to have people, consultants and a system in place. The first step is planning out the stages and carefully preparing for how to manage the influx of leads and responsibilities that come with franchise sales. The beauty and excitement of franchising is that with each franchise sale a company is expanded into a new market, the franchisor gains the valuable work ethic and commitment of a vested owner operator and the franchisee gets the training and support needed for them to become their own business owner.

How Franchise Attorneys Can Help You

Before buying a franchise, you must make sure that the terms are clear. Franchise agreement must be spelled out.

This is where franchise attorneys enter the picture. With him coming in between, the legalities are spelled out and therefore it wouldn't be as confusing. With their assistance, investing in a franchise business will be legitimate.

By consulting a franchise attorney who is knowledgeable when it comes to franchising, the purchaser would not only be assisted but also informed about the possible risks. At least with the franchise attorney beside the purchaser, the latter would consider whether he would invest or not invest on a particular franchise.

Here are some warning signs that you might be involved in fraud franchise purchases:

1. If the franchisor cannot disclose all important information to you, then he is probably hiding something. Ask your franchise attorney to consult with the franchisor. In that way, the franchisor will be required to show the important documents that you need to see before you make an investment.

2. Do not feel pressured to purchase a franchise or to make up your mind with the snap of your fingers. Any investment decision needs sufficient time to be thoroughly pondered on. If you can, you can converse with your franchise attorney about this. He will be able to help you be cautious with your decisions.

3. A franchise attorney will be able to distinguish unrealistic profits when he sees it. The franchisor with a successful business cannot promise you money the very minute you invest in his business. You must be very careful whenever the franchisor says that you can make a lot of money with little risk.

You must know that franchise succeeds because they operate in a system that is brought together under one trademark - such as buying power and group advertising. It may sound appealing for an investor but there is no assurance that a success is guaranteed.

A franchise attorney reminds you that there is no guarantee to make money. Franchise is a long-term investment and in order for you to take back what you spent, several years must go by before you do so. You cannot get rich quickly in this business, it is just not possible.

At least, by consulting a franchise attorney who has financial experience in the field of franchising, you get what you pay for. By seeking professional advice regarding legal and accounting matters, you will have a second opinion. If you do not follow professional advice, you might be kicking your behind later on.

Ask your franchise attorney to explain the complicated topics like advertising fees, copyright infringement, royalty payments and the effect of contract violations. You must always choose a lawyer that you are comfortable with. Plus, he must be someone you can afford. You have the right to know in advance how much initial consultations cost.

The franchise attorney can also help your study the estimate of initial expenses. In order to make the cost of buying a franchise appear to be cheaper than it really is, franchisors often underestimate these expenses. If the estimate is low, it will take a longer time for the business to actually produce a profit.

It helps to have someone beside you when you're making crucial decisions involving money - such as purchasing franchises. At least, if you are with a franchise attorney you trust, you will be sure of your decisions before signing on the contract.

10 Tips For Choosing a Franchise Opportunity

For those who have decided a franchise could possibly be a great choice for you then being aware of what to try and do next can easily be the difference between disappointment and success. There are various important considerations to take into consideration once you've made the choice of going the franchise opportunity or non-franchise route.

Listed below are ten important considerations that can assist you on your way:-

1. Explore Choices

Use online franchise business directories, franchise shows and franchise publications to research the options available. You will find a huge selection of franchises available on the market so make sure you try to find something you'll take pleasure in doing and that could suit your lifestyle and budget.

2. Produce a shortlist

After looking at a number of franchise opportunities you might be interested by, draw up a shortlist of 2 or three that you could really see yourself doing. Aquire their franchise information packs either by way of online contact request or pick up the phone.

3. Explore Background

It's crucial that you identify who you're dealing with as you will be making a considerable investment. Take a while to discover the franchise company's working history. You may also wish to investigate the directors of the franchise companies and find out what other ventures they have got or are already associated with. You could find online tools, like the Companies House website, useful.

4. Get together with the Franchisors

As soon as you feel totally clued-up about your shortlist of franchisors, its time to phone them and plan to get together with them. Pay a visit to their central offices and get a feel for their business. At the same time as you're there, ask for contact details for some of their franchisees as recommendations.

5. Talk to Franchisees

Contact your list of franchisees and ask them questions on how the franchise business performs for them as a commercial venture. Are they trading beneficially? Would they buy the franchise business over again given what they currently see?

6. Research Financing Avenues

There can be many avenues to financing. You may have your own funds to make an investment from savings or a redundancy. More choices could be an external sponsor or main high street banks. It pays to talk to a bank manager nonetheless, present your franchise plan and find some useful feedback as to what financing potential you might have.

7. Obtain Professional Advice

Many people determine they require some professional assistance in the investigation and purchasing process. For this reason, you can find specialist franchise business consultants who have a considerable knowledge of the intricacies of a franchise business that can aid with matching you to a franchise opportunity that works best for you in combination with helping everything proceed smoothly.

8. Acquire Legal Advice

You'll have to sign a franchise contract as soon as you have decided on the most effective franchise opportunity for you. It's vital that you get proper legal guidance from a franchise specialist lawyer who can help to make sure that any legal requirements are met and to help you understand the legal agreement you will be entering into.

9. Gut Feeling

How you are feeling about starting your franchise can't be ignored. It's normal to have many of queries, notably as you become close to making a choice. The franchisor, and any other franchise gurus you seek advice from through the process ought to have the ability to offer answers and assist you to along your way. However, if you are feeling distress at any point, take a step back to figure out what you might be worried about and settle it before moving forward.

10. Lets get down to some good old fashioned work

A franchise, similar to any other business, requires hard work. Don't be taken in to think that a franchise works inevitably simply because its a 'franchise'. A franchise provides a proven system... but the system needs to be worked hard as a way to build a strong and beneficial business

The Advantages of Franchise Businesses

Pretty much any service that springs to mind can usually be franchised and many already have been. Looking through many of the online franchise websites will soon give you a notion of the quantity of franchise options accessible to more or less anybody with some capital to invest, a keenness to gain knowledge, a loyalty to dedicate yourself to the system and work hard.

With that in mind what could be the advantages to a franchise system over traditional self-employment? On the outside it could appear like you are actually paying a franchise fee to another company to just work under their brand only, but there are some notable differences that can potentially make a franchise business a preferred choice.

An tried and tested business system

The heart of a franchise opportunity is its established system. A franchisor generally starts out as a conventional operation who, after proving the business is profitable, will often seek out further ways to expand their already successful business. The spirit of the franchise idea is, very simply, the duplication of a proven business model. This offers a considerable benefit of self-employment in that the franchise owner has previously piloted the business and documented it which has the advantage that it can followed by another giving them the ability to replicate their success.

Branding and Customer Awareness

Obviously there are the big name, familiar, food chain franchises that by the influence of their branding and advertising stand for substantial advantages when compared to setting up your own anonymous named business. However even with less significant, lesser identified franchise brands, the buyer perception that it is division of a much larger group can in itself bring safety and belief to the customer that the franchise is not just a here today, gone tomorrow business but there is a larger group underneath it.

Financing

Many major banks look favourably on franchise start-ups because of their demonstrated track record. This can be especially true for fully established franchises given that the franchise departments of the major banks generally keep records on what franchise businesses appear to be performing well. This can be a plus over usual self-employed start-ups that could be more of a challenge to obtain financing and support from the bank.

Backup

A decent franchisor will offer backup and training to ensure the best possibility of success. Ultimately, the business belongs to the franchisee and he or she is liable for its failure or success. On the other hand, when times are challenging or inspiration is low it should mean there is a person to talk to for advice and help.

These are only a few of the most important advantages in choosing a franchise system when compared to going it single-handedly. In spite of this, investing in a franchise is like investing in any other business venture. Taking on any investment demands careful research to make sure of well clued-up decisions and not throwing warning to the wind for the reason that a business opportunity has a 'franchise' label. Judge thoroughly, do your research, speak to current franchisees and take your time.

The Perils and Pitfalls of Franchising

Introduction

We have all heard of the term "franchising", and most of us know people involved in it. After all, it now contributes more than 10 billion to the UK economy, across numerous business sectors. But what is it really all about, and how are some businesses so successful at it, whilst for others it brings disaster? In this article we will be looking at:

The basics - what is a franchise, and how does it operate?

What do you need to know if you are thinking about buying a franchise?

What should you consider if you are thinking about developing your business through franchising?

The basics of franchising

The concept is fairly simple. In a franchise, an established business ("the franchisor") grants someone ("the franchisee") the right to trade under the franchisor's trade mark or trade name.

Most franchising is actually "business format" franchising. This means that the franchisor develops a business concept, including a trade name and operating methods, and they train the franchisee in how to run their business using this concept. The franchisee operates his/her own business under the franchisor's name and under some fairly tight controls and guidance. These are set out in a franchise agreement, and usually an operations manual as well.

At heart, a franchise agreement is essentially a trade mark licence, with a number of operational instructions and controls placed on the franchisee.

In many cases, the franchisee is given an "exclusive" territory in which to operate during the term of the franchise agreement.

In exchange for the right to use the trade name and operating methods, the franchisee normally pays the franchisor:

An up-front fee (usually 5k upwards)

Ongoing payments (referred to as "royalties" or "management service fees") which are usually paid monthly, and tend to be either a fixed percentage of gross sales (generally 5 - 11%), or otherwise a set monthly figure.

The franchisee is sometimes required to make contributions to a central marketing fund operated by the franchisor.

In addition, the franchisee may have to pay to acquire premises, stock, equipment etc.

For franchisors, franchising can therefore be an exceptionally quick route to business growth, with low overheads and low risk. We will look at this in more detail later on in this article. For franchisees, franchising can provide an attractive opportunity to own and operate their own business, but one which has a proven business concept and which provides training and support. Franchising can in some cases also provide a very rare opportunity for genuine work/life balance.

What you need to know if you are thinking about buying a franchise

Sadly however, as with everything in life, it is not always that simple. Although survival rates for franchisee businesses are much higher than for other business start-ups, franchisees all too often fail. Some lose substantial amounts of money, often through no fault of their own.

Below are some of the perils to avoid:

Peril No. 1 - Not doing enough "homework" before handing over your cash

Most franchisors can "talk a good talk". It is their job to convince you that their franchise offering will bring you wealth and success. However, whilst many franchisors are scrupulously honest and professional in their dealings with prospective franchisees, some of them are unfortunately not.

Remember - when you take on a franchise this is a "business to business" agreement. There is no consumer law to protect you, so your legal remedies may be very limited. It is your responsibility to check out what you are being told, and never to take promises and forecasts on face value.

It pays to remember the age-old saying: "If it sounds too good to be true, it probably is"... !

Things to check out before signing up:

Do the figures in the franchisor's projections really add up? Consider asking your accountant to check out the projected figures to see if they are realistic. Ask other franchisees. Do the figures allow a suitable margin for error? For example, it should be possible for you to fall a little short of conservative projections and still make a profit that you can live on.

Research your market. Is there already a proven customer demand for your product/service? Does your territory have the right demographics (disposable incomes, buying trends etc)? Is the market already over-saturated with competing offerings?

Get inside information from other franchisees (and be wary of franchisors who do not want you to speak to their other franchisees).

How long has your franchisor been established? Do they already have a proven track record of success? If they are a new business, this is not necessarily proof of disaster ahead. But being realistic, you are taking on much more risk with a new business than you are with a well-established one.

If you are a member of a networking group, consider discussing the business opportunity with other members, to get their thoughts and feedback. They may give you a more objective view than close friends or family members.

Search on-line for comments or information about your franchisor. Are there lots of happy customers out there, or heaps of complaints?

Is the franchisor a member of the British Franchise Association? Remember that not all franchise systems are necessarily well thought out or well tested. Membership of the British Franchise Association - requiring the signing of a charter for ethical franchising - is a good indicator of an opportunity worthy of consideration, although there is no substitute for properly checking out and researching a franchise.

Peril No. 2 - Taking on a franchise which does not play to your personal strengths

You need to think long and hard about whether taking on a franchise will suit your personality and skills. You may imagine, for example, during a frustrating day at the office, that nothing would be lovelier than leaving the rat-race and running your own cafe. But beware of the "grass is greener over the fence" philosophy. No matter what franchise you take on, it is likely to involve hard work, and this will never be satisfying unless it is something that you are passionate about.

The key traits that franchisors are looking for in their franchisees include:

Enthusiasm for their industry. Will you be a good ambassador for their brand?

Willingness to operate within the confines of the franchisor's operating system. (In other words, franchising will not be right for you if you are a free-sprited entrepreneur who wants to do their own thing.)

Motivation and a strong work-ethic.

In many cases, financial literacy and management skills.

Peril No. 3 - Missing an opportunity to negotiate

For most franchisors, franchisee recruitment is their single biggest challenge. Competition amongst franchisors to find franchisees is often fierce. This is particularly so in the early stages of a franchise offering. If you are one of the franchisor's first 5 prospective franchisees, you may have more scope to negotiate on fees than you think. Some franchisors will never negotiate, but others will, so it is worth giving it a try.

Peril No. 4 - Not taking advice

It is tempting to save costs by not getting legal advice. Unfortunately, this can turn out to be a false economy. Most BFA affiliated lawyers will review and advise you on your proposed franchise agreement for an agreed fixed fee. Even though many franchisors will not negotiate over the terms of their franchise agreement, a BFA affiliated lawyer will be able (i) to explain to you exactly what the implications of your franchise agreement are for you; and (ii) to alert you if anything in your agreement is non-standard, or unworkable.

When you buy a franchise, you are taking on some significant commitments and liabilities, and these usually include obligations and restrictions which continue after your franchise comes to an end. Consulting an expert lawyer will give you peace of mind.

What to consider if you are thinking about developing your business through franchising

The variety of businesses involved in the franchise industry is astounding. While the most obvious examples are the high street variety, such as fashion retail stores, fast food restaurants and print/copy centres, there are a huge number of service concepts offering franchises too, such as business coaches, automotive aftercare providers, networking organisations, children's activities, snack machine distributors and travel agencies.

An increasing number of new businesses plan their development from the beginning with an eye to the potential for franchising in the long term. So often it pays to take advice at an early stage.

Franchising can be a very attractive route for growth for many businesses. It has a number of features in its favour:

Franchising often enables businesses to quickly establish a national presence within a few years, achieving a rate of network growth which would be inconceivable through company funded development.

The resources you will need to contribute to the opening of a franchised outlet are far less than if you were opening a company-owned store - the franchisee will fund assets such as the premises lease and fit-out, recruits and trains the staff and implements the local marketing campaign. This enables you to develop a compact management base focused on assisting multiple franchisees to launch their business simultaneously, rather than methodically opening branch after branch, and sourcing new startup capital for each.

By taking the franchise route you can cut overheads. If you do it right, then you have fewer staffing and administration issues, and can focus more time on developing the business. By speeding up expansion, your business network achieves higher economies of scale earlier, stronger brand awareness, is much sooner able to challenge for national contracts and, in the case of a fledgling market, is in a much better position to capture early market leadership and establish a dominant position over its competitors.

As the capital outlay is generally lower, your business risks are often reduced.

Franchising can facilitate growth overseas which might otherwise be impossible, particularly if you recruit franchisees in local markets who have contacts and market knowledge that you may not have.

But franchising does not suit every business, and some businesses come unstuck by jumping into franchising too quickly. Here are some working examples of how things can go wrong:

Peril No. 1 - Being too hasty to launch

To get the best for your business, you need to have an eye to the long-term. Franchising might be a great route for future growth, but now may not yet be the best time to embark on it. Essentially, when you launch into franchising, you are selling a brand and a business concept. As a rough rule of thumb, the longer your business has been operating, the more value you build, and the higher the price the franchisor can ask for a franchise.

Issues to consider are:

Business owners are mainly attracted to franchising because it offers access to an established business model which has been properly tested and proven by the franchisor. If you are coming to the franchise market with a business idea that hasn't chalked up a year of operations and satisfactory financial performance, then you may well find it difficult to compete against other franchisors on franchisee recruitment.

If you launch before you have time to try and test your operating methods, there is a risk that your franchisees will run into trouble and look to you to pick up the pieces. And you might be as "at sea" as they are about how to fix things.

Have you registered your trade mark and had proper advice about protecting your intellectual property? It is never wise to embark on franchising before you have done this. As your network grows to national status, building brand credibility and positive customer goodwill, the importance of your brand protection will grow as local competitors challenge your franchisees.

Peril No.2 - recruiting "anything with a pulse", or "anyone with a cheque-book"

For most franchisors, finding and recruiting franchisees is their single biggest challenge. There are far more franchise offerings available on the market than there are prospective franchisees who want to buy them. This means that competition is strong and franchisees can afford to pick and choose. Although you may start off with fine intentions about only taking on people who are exactly right, there is an inevitable pressure to get recruits in so that you start earning fees. Even one badly performing franchisee can absorb a hugely disproportionate amount of management time, and a number of badly performing franchisees can damage your brand and even bring your business to its knees.

Peril No. 3 - Not getting the right advice

Lawyers and consultants who are affiliated with the British Franchise Association are experts in the franchise industry, and their BFA membership means that they are required to operate within a framework of ethical standards. If you are thinking of developing a franchise business, it is a good investment to talk to experts who you can trust.

However, it pays to shop around. Some advisers provide better value for money than others. Some advisers will tie you in to a deal where you pay one big lump sum for a variety of services. Others will tailor-make their services for you, so that you only pay for the services that you actually want or need. And it is best of all if you can speak to someone who can help you to evaluate franchising against other potential routes to growth. In some cases, for example, a licensing or agency arrangement may suit your business much better. So if your adviser has no expertise in these fields, it might make sense to find someone else.

7 Benefits Of Franchising

Statistics on franchising are astounding for the period 2005-2006 in the US there were approximately 1500 brands franchised with more than 767483 outlets with a turnover of USD62460 billion. The figures are an indication that franchising is an accepted concept that is profitable.

All over the world people are choosing to run franchises instead of floating new businesses as with franchising all the basic market surveys, research, and business plans are already in place and working. So, entrepreneurs young and old choose to become franchises of a running and profitable chain and be their own bosses. If working for a company is not your cup of tea then consider franchising as a business module, it has many benefits:

1. When you take up a franchise you are taking on a business that is already flourishing. The business module is complete in all respects and any problems have been ironed out by the person who first established the business. What you get is a ready made package that just needs to be run.

2. By franchising you get not just a business by all the support you need in terms of marketing, customer relations, accounting, staff training and deployment, as well as in the day to day running. You become part of a local or global group that networks and interacts on all aspects of the business.

3. Solutions to hitches or problems encountered in business are always on hand, the franchise chain will lend complete technical support and any other assistance required. The chain will function as a single unit as far as technology, machinery, group branding, and advertising and so on is concerned.

4. The progress or expansion in the business will occur as a collective group and professional consultancies and so on will be carried out for the whole group of units. This means the think tank is much large as also the resources.

5. Aspects like future plans, product research, buying power, expansion of activities, market surveys, and more will be done as a chain and so you will just reap the benefits. The risk will be collective and not individual as in other business modules.

6. You will be your own boss and be working towards securing your own future. The devotion and long hours will help you reap many benefits and respect.

7. With franchising your staff would be trained by the franchise major and so what you will get is people who can function well without constant supervision and watching over. As the world innovates your business will keep abreast of the changes.

World wide business gurus advice that "a franchising business module is the safest and most dependable choice in business entrepreneurship." A franchise can make dreams come true of owning and running your own business without the accompanying heartaches.

Franchising in Real Estate

The concept of Estate Agency Franchise although relatively new in Ireland is more mature and common place in other jurisdictions or other countries particularly the United States.

The earliest sign of franchising in any sector dates back to the 1850's with Isaac Singer the inventor of the Singer sewing machine. During his search for an effective and an affordable way to distribute his product for his company, the Singing Sewing Centre, Singer ran into problems that prevented his company from being successful. His first problem was a lack of capital for manufacturing his machines. Secondly, no one was willing to buy his sewing machines without first being taught how to use them, which required effort that most traditional retailers could not provide. Singer's solution was to charge licensing fees to business people who would own the rights to sell his machines in certain geographical areas. They would also be responsible for teaching consumers how to use his machines, thereby creating sales opportunities. Other companies noticed this novel approach and modified this business model. Now there are franchise companies providing a plethora of products and services to consumers and businesses around the world. From "Bark Busters" a franchise to keep dogs from barking and disturbing the neighbours to Crime Scene clean up!, the list keeps on growing.

An estate agency franchise is a contract or agreement where the Franchisor, the Owner and Developer of the franchise system licences, franchisees the use of trademarks, service marks, logos, or advertising owned or developed by the Franchisor. Some franchise systems are operated using only the Franchisor's brand name such as McDonald's. In others the franchised brand is used in tandem with a trade name which the franchisee establishes. Examples in Ireland include Coldwell Banker Paul Doyle Estates.

The common brand enables all participants in the franchising system to benefit from advertising and good will generated from the operation of each unit whether operated by franchisees or the franchisor. Since consumers are brand driven, this larger, more recognised name created by common use of the franchise logo tends to drive customers to the franchised business.

Every successful franchise organisation involves a method of doing business which is common to all franchisees and franchisor. The business systems in the real estate market usually include methods of delivering services, standard signage, accounting systems, inventory control and data management. This systematic method of doing business employs a feature of franchising known as "Speed to Market", meaning a business can rapidly expand their delivery of services to consumers since they repeat successful methods in every transaction.

Franchisors usually levy an initial franchise fee followed by monthly royalty and advertising fees. Typically in Ireland the initial franchise fee is €20,000 to €35,000, on going royalty fees from 6% - 9% of gross revenue. There's usually minimum fees for the National Advertising Fund ranging from €3,000 per annum to 2 1/2% of gross revenue. Other fees may be levied for the licence to the technology provided, and ongoing training. This pooling of resources allows franchisees access to business systems that are ordinarily the province much larger organisations.

Most estate agency organisations require franchisees to contribute to regional or national advertising funds and also to spend money promoting the brand locally. The benefits of cooperative advertising in franchise systems arise both from the increase number of advertisements that multiple contributors can buy, and also from professional advertising agencies, market research, public relations, and other support.

The franchisee is an independent operator owning his own business. Franchisees operate their own businesses, are entitled to all profits that are generated, are responsible for paying their own taxes and to their own employees. In Ireland the majority of estate agency franchisees are conversions of existing businesses rather than new start ups, (however this is changing in favour of start ups). This form of franchise occurs when the owner of an operating estate agency office decides to affiliate or franchise to a franchise chain to take advantage of the brand and certain components of the operating system. This is a different type of franchise relationship than is typically seen in the fast-food industry where the business owners do not need to know anything about running a restaurant in order to operate the franchise.

In affiliation franchising to date in Ireland, the franchisee is allowed to continue using a pre existing trade name along with the franchisors brand name. Conversion franchising or affiliation franchising is the most commonly used in estate agency. The franchisor seeks active owner operators, believing that value is added to a franchise business by having the motivation and entrepreneurial efforts of owner operators.

The development of ecommerce and the internet has resulted in the potential increase in franchising. Through the internet and intra nets, franchising companies are able to communicate faster and better with franchisees, suppliers and consumers. If you own an estate agency is franchising right for you? That depends. Franchising is a business strategy in which the parties share many interests, but not all. Both parties depend on the efforts of the other for their own success, but don't necessarily succeed just because their partner does. Franchising only thrives when both franchisor and franchisees achieve their objectives. Although it shares some attributes with a partnership, franchising is not a true "partnership". However there are many benefits of franchising. For example, business owners do not have to maintain a brand name or consider the best way to operate their business. These elements are provided by the franchisor which in turn allows franchisees to concentrate on expanding their business The reputation that the brand conveys is immediately available to the new franchisees.

Franchising is a business relationship and each relationship is personal. No two people who are approached will find the same advantages or disadvantages of franchising. Many factors will influence whether a franchise relationship is good, just as many factors influence whether any other personal or business relationship is good. And, as in any relationship, the benefits to the parties to a franchise relationship must, over the long term must out weigh any disadvantages, if the relationship is to endure.

Expect no more than what the franchisor promises in writing in the franchise agreement. Confirm your understanding of those promises through conversations with existing franchisees and question the franchisor. Ensure that the franchisor responds to the issues that concern you about its programme before you enter into any agreement.

After the franchise agreements have been signed most estate agency franchisors will help franchisees to develop or revise business plans. Training and orientation of the franchisors business systems will be delivered within the first few months to the manager/owner of the franchisee company and in cooperation with the manager/owner, training will be delivered to the sales agents and administrative staff. Some estate agency franchisors also employ business consultants to liaise with the franchisees on an ongoing basis to assist them to grow innovate and increase their market share.

One of the most valuable forms of business consultation available to estate agency franchisee arises from the relationship one franchisee develops with other franchisees within the network. Whether they meet locally, regionally nationally or internationally franchisees in the same system develop a kinship and collegiality arising from the way they address similar problems. Most franchise organisations have formal and informal franchisee networks, within which franchisees are typically willing to share their experiences with their colleagues.

Most estate agents in Ireland are so focused on day to day operations that they have very little time to devote to research and development. Franchisors often become aware of market trends and other developments if for no other reason than they operate in differing markets around the country or around the world and because they are active in industry associations. Estate agency franchisors are usually leaders in their industries and employ professional staff whose job description includes finding ways to do things better. They naturally attract consultants and others with new products and business ideas. This knowledge is generally freely passed onto franchisees and often works its way into the business strategies of the franchise network.

On the reverse side many franchisees often come up with new ideas on ways of doing business, which they also share with their colleagues and the franchisor. In fact, most franchise agreements require this sharing of ideas and information. Most franchise organisations test new ideas for products with franchisees before "rolling them out" through the rest of the franchise organisation. This approach to innovation can often avoid mistakes, although it does not dictate that every innovation or marketing plan will be successful.

However, surely one of the most important benefits is the business resale opportunity also called the "exit strategy. At some point the owner of every business wants to sell on or otherwise transfer ownership of his or her business. The business which has an established reputation and brand name often is attractive for purchasers by the franchisor, existing franchisees, as well as by prospective franchisees. Because franchisors are regularly engaged in recruiting new franchisees they also may be able to identify someone who would rather invest in an existing business rather than a new franchise business. Sometimes the franchisor in considering an initial public offering of its stock may want to acquire a successful franchisees business to make it a part of a public offer. This along with the fact that franchisees have contracts that provide support, access to business systems and a recognised brand name may enable franchisees to participate in and be paid a higher multiple of earnings than might be paid if the business was sold other than as a part of a publicly traded company. There is likely to be a higher demand for a business that operates as a franchisee of a successful franchising company than there is for a small business which has a single location and which is perceived to be successful primarily because of the reputation and skills of the individual business owner.

Franchising in estate agency is growing rapidly. In Ireland of the 1200 estate agencies around 470 are in franchise or quasi franchise groupings. Although only over 1/3 of the offices these groups have over 2/3 of the market share.

So if you are considering expanding your estate agency business or setting up then you should consider franchising. We think it will even make your bank manager smile.