What is a franchise business?
A franchise business is a form of trade practiced by few companies for distributing their products by third parties. The independent operator trades with the business method, goodwill and goods of the company. He/ she has to pay a royalty fee and a percentage of their total income to the company. The company who allows the independent operator to use its trademarked goods is called the franchisors. The independent operator who takes this kind of dealing is called franchisee.
Which are the companies who can opt for this form of trade?
This form of trade is very useful for expansion purpose. Some companies who can opt for this kind of dealing are:
* Companies with a good annual profit record.
* Companies expanded over a larger geographical area.
* Companies with unusual concepts.
* Companies which are less expensive to operate.
What are the advantages of Franchise business?
Such trades are advantageous on the part of the owner as well as the holders.
From the holder's perspective:
* It provides self employment opportunities to the person who has acquired the license for some trade from the owner.
* It provides an opportunity to start this form of dealing without having to go through a lot of hazards of starting a new company altogether.
* It provides the new holder with training from the prime owner. With this expert training he/ she stands with a bright opportunity of expanding their trade.
From the owner's perspective:
* They have the opportunity to expand their business over a larger area.
* They will have to go through lesser legal proceedings. It is a kind of selling out the ownership with some other person.
* They will have the opportunity to get a higher income. The holder will utilize his full expertise to attain the highest income. This in turn will come as an income to the owner.
Therefore, on an overall basis you can call such dealings the safest bet for you. If you are the owner then you can get your business expanded without having to worry a lot. At the end of the year you can expect to get a handsome amount as royalty fee and percentage of the total income of the franchisee business.
If you are the holder then you can enjoy the entire profit of the business by giving out only a part of the total income. The success of both the parties depends on how well they bid on the contract amount. The holder will be successful if he can bid the lowest royalty fee and percentage on the total income. The owner is always the most beneficent. In any case, it is a win-win situation for both the parties.
Source: Franchising Nation, eNewsletter, Team India Managers Ltd
Showing posts with label franchising. Show all posts
Showing posts with label franchising. Show all posts
Thursday, February 11, 2010
Friday, December 18, 2009
Swiss Smile Dental Clinics - Europe's leading Dental Services Brand - enters India
This is Swiss Smile Dental Clinics' first foray outside Europe; Swiss Smile Dental Clinics India Pvt. Ltd. to have state-of-the-art facilities and foreign trained consultants; First clinic to open in January 2010 in Bangalore giving a boost to Dental tourism in India
Bengaluru, Karnataka, December 18, 2009 /India PRwire/ -- Swiss Smile Dental Clinics - Europe's leading dental service brand - today announced the launch of its India operations. Marking its first foray outside Europe, Swiss Smile is venturing into India to bring its world class services to one of the largest dentistry markets in the world. Swiss Smile Dental Clinics India will have state-of-the-art facilities and foreign trained consultants providing co-ordinated specialized next generation dental care to customers, all under one roof.
Swiss Smile is entering India through a Joint Venture (JV) between Global Tech Park - an investment firm with interests in real estate, design engineering and health care - and Swiss Smile Holdings. Global Tech Park would be holding 50% stake in the JV while Swiss Smile Holdings would hold the remaining 50%.
Speaking on Swiss Smile Dental Clinics' first foray outside Europe, Mr. Clifford Zur Nieden - Member of the Board, Swiss Smile Holdings said, "The dental segment is one of the most attractive segments of the health care industry with an estimated market size of about US$18.8 billion in 2008. Worldwide, this market is dominated by US, Europe and Japan. However, an increasingly aging population coupled with growing awareness of oral health and dental aesthetics and greater availability of improved dental treatment have boosted the growth of this segment in India. In addition, increasing disposable incomes and a large emerging middle class offer enormous potential for dentistry in India".
Elaborating on the significance of the launch of Swiss Smile Dental Clinics' operations in India, Mr. Zur Nieden said, "India needs to leapfrog to reach the level of technological development that Western countries have achieved in dentistry. India is in need of international expertise and this can only be achieved by setting up world class dental facilities like the Swiss Smile Dental Clinic. There is an enormous demand supply gap for world class organized facilities in the Indian dental market and we aim to bridge this gap".
Speaking on the plans of Swiss Smile Dental Clinics India, Dr. Sathya Kallur - CEO & Director of Clinical Operations- Swiss Smile Dental Clinics India said, "Although dental care remains a luxury for much of India's vast population, the market for dentistry is expanding as a result of the strengthening economy and an increase in the country's middle class across major cities such as Bangalore, New Delhi, Hyderabad etc. To respond to the growing consumer health care needs and expectations, we are setting up our first clinic in Bangalore followed by other markets like Hyderabad, Mumbai, Chandigarh, NCR, Ahmedabad, Chennai, Kolkata and Pune."
Articulating the vision of Swiss Smile Dental Clinic India, Dr. Sathya said, "We are planning to set up 10 state-of-the art dental care facilities in India within the next 3 years. Our vision is to provide multi-specialty dental care under one roof under the guidance of internationally acclaimed and trained dental specialists. The Indian dental market lacks an organized professional outfit and with the Swiss Smile technological expertise and state-of-the-art facilities, we are sure to bring in a positive change in the state of Indian dentistry."
Elaborating on the medical tourism potential and opportunity, Dr. Sathya said, "We also aim at contributing to the Indian medical tourism industry which is expected to experience an annual growth of 30% making it a Rs. 9,500 crore industry by 2015. The estimate of the value of medical tourism to India is to the tune of $2 billion a year by 2012. The dental tourism in India would account for 10% of the total medical tourism. In India, any dental service is 60% to 70% cheaper than Europe or the US. We therefore, aim to contribute to medical tourism in India by offering quality services at reasonable prices".
Speaking on the JV, Mr. Satish CMD - Swiss Smile Dental Clinics India & CMD - CEO - Global Tech Park - said, "The dental care segment offers a tremendous opportunity in India. We feel there is a need for a technologically advanced, world class facility providing international services to the Indian customer. Hence this JV with Swiss Smile Holding".
Notes to Editor
Swiss Smile Dental Clinics (www.swisssmile.com) - Swiss Smile Dental Clinics was started by Haleh and Golnar Abivardi and is successfully running clinics in Zurich, St. Moritz and London. The Swiss Smile Dental Clinics are dedicated to promoting healthy and beautiful teeth. Equipped with the latest technology, a team of highly qualified dental specialists take care of customers providing a truly world class experience. Swiss Smile Dental Clinics services encompass all areas of dental health including aesthetic dentistry, orthodontics, parodontology, oral surgery, emergency treatments and children's dentistry. Swiss Smile provides the security of in-house treatments at every stage, delivered by a highly competent and co-operative team which guarantees high levels of professionalism in all major areas of dental treatment.
Global Tech Park Pvt. Ltd. - is an investment company based in Bangalore with interests in the areas of real-estate, IT, design engineering and Healthcare. Global Tech Park has till date invested in companies like EDRC Technologies Pvt. Ltd.; Hands Free Networks, Global tech park - Tech Park Infrastructure Creation.
Source: http://www.indiaprwire.com/pressrelease/health-care/2009121839811.htm
Bengaluru, Karnataka, December 18, 2009 /India PRwire/ -- Swiss Smile Dental Clinics - Europe's leading dental service brand - today announced the launch of its India operations. Marking its first foray outside Europe, Swiss Smile is venturing into India to bring its world class services to one of the largest dentistry markets in the world. Swiss Smile Dental Clinics India will have state-of-the-art facilities and foreign trained consultants providing co-ordinated specialized next generation dental care to customers, all under one roof.
Swiss Smile is entering India through a Joint Venture (JV) between Global Tech Park - an investment firm with interests in real estate, design engineering and health care - and Swiss Smile Holdings. Global Tech Park would be holding 50% stake in the JV while Swiss Smile Holdings would hold the remaining 50%.
Speaking on Swiss Smile Dental Clinics' first foray outside Europe, Mr. Clifford Zur Nieden - Member of the Board, Swiss Smile Holdings said, "The dental segment is one of the most attractive segments of the health care industry with an estimated market size of about US$18.8 billion in 2008. Worldwide, this market is dominated by US, Europe and Japan. However, an increasingly aging population coupled with growing awareness of oral health and dental aesthetics and greater availability of improved dental treatment have boosted the growth of this segment in India. In addition, increasing disposable incomes and a large emerging middle class offer enormous potential for dentistry in India".
Elaborating on the significance of the launch of Swiss Smile Dental Clinics' operations in India, Mr. Zur Nieden said, "India needs to leapfrog to reach the level of technological development that Western countries have achieved in dentistry. India is in need of international expertise and this can only be achieved by setting up world class dental facilities like the Swiss Smile Dental Clinic. There is an enormous demand supply gap for world class organized facilities in the Indian dental market and we aim to bridge this gap".
Speaking on the plans of Swiss Smile Dental Clinics India, Dr. Sathya Kallur - CEO & Director of Clinical Operations- Swiss Smile Dental Clinics India said, "Although dental care remains a luxury for much of India's vast population, the market for dentistry is expanding as a result of the strengthening economy and an increase in the country's middle class across major cities such as Bangalore, New Delhi, Hyderabad etc. To respond to the growing consumer health care needs and expectations, we are setting up our first clinic in Bangalore followed by other markets like Hyderabad, Mumbai, Chandigarh, NCR, Ahmedabad, Chennai, Kolkata and Pune."
Articulating the vision of Swiss Smile Dental Clinic India, Dr. Sathya said, "We are planning to set up 10 state-of-the art dental care facilities in India within the next 3 years. Our vision is to provide multi-specialty dental care under one roof under the guidance of internationally acclaimed and trained dental specialists. The Indian dental market lacks an organized professional outfit and with the Swiss Smile technological expertise and state-of-the-art facilities, we are sure to bring in a positive change in the state of Indian dentistry."
Elaborating on the medical tourism potential and opportunity, Dr. Sathya said, "We also aim at contributing to the Indian medical tourism industry which is expected to experience an annual growth of 30% making it a Rs. 9,500 crore industry by 2015. The estimate of the value of medical tourism to India is to the tune of $2 billion a year by 2012. The dental tourism in India would account for 10% of the total medical tourism. In India, any dental service is 60% to 70% cheaper than Europe or the US. We therefore, aim to contribute to medical tourism in India by offering quality services at reasonable prices".
Speaking on the JV, Mr. Satish CMD - Swiss Smile Dental Clinics India & CMD - CEO - Global Tech Park - said, "The dental care segment offers a tremendous opportunity in India. We feel there is a need for a technologically advanced, world class facility providing international services to the Indian customer. Hence this JV with Swiss Smile Holding".
Notes to Editor
Swiss Smile Dental Clinics (www.swisssmile.com) - Swiss Smile Dental Clinics was started by Haleh and Golnar Abivardi and is successfully running clinics in Zurich, St. Moritz and London. The Swiss Smile Dental Clinics are dedicated to promoting healthy and beautiful teeth. Equipped with the latest technology, a team of highly qualified dental specialists take care of customers providing a truly world class experience. Swiss Smile Dental Clinics services encompass all areas of dental health including aesthetic dentistry, orthodontics, parodontology, oral surgery, emergency treatments and children's dentistry. Swiss Smile provides the security of in-house treatments at every stage, delivered by a highly competent and co-operative team which guarantees high levels of professionalism in all major areas of dental treatment.
Global Tech Park Pvt. Ltd. - is an investment company based in Bangalore with interests in the areas of real-estate, IT, design engineering and Healthcare. Global Tech Park has till date invested in companies like EDRC Technologies Pvt. Ltd.; Hands Free Networks, Global tech park - Tech Park Infrastructure Creation.
Source: http://www.indiaprwire.com/pressrelease/health-care/2009121839811.htm
Wednesday, December 16, 2009
Franchising: Yesterday, Today and Tomorrow
by Paul Segreto on December 14, 2009
As I often do on the weekends, I was searching through my personal library seeking out a book or two that might provide me some inspiration for an article or report, and this weekend, I came across a business book that was published back in 1979. The book, “Free Yourself in a Business of Your Own” by Byron Lane, caught my eye for reasons I cannot really explain. Obviously, I’ve had it in my possession for many years, yet, never opened it again since I purchased it for $1.29 at Target. It must have been a clearance book as the cover price was $5.95. Anyway, I can’t even recall seeing it when I routinely search through my library. It’s like it suddenly jumped out front and center and said, “Hey, look here!”
Well, I decided to look through the book because the back cover stated, “This book is about freedom. Freedom from an 8 to 5 regimen. Freedom from dehumanizing democracies. Freedom from job boredom. Freedom from the lock-step culture. Freedom to do your work your way.” Hmmm… not much seems to have changed although lock-step culture is not one I’ve heard of before.
Right away, my thoughts turned to franchising and I began to think about what franchising was like back in 1979. Fortunately, I didn’t have to think very hard, as to my surprise, was a chapter on franchising! It’s placement was to present franchising strictly as an alternative to other forms of business ownership, and in a book with 174 pages, the franchising chapter comprised all of 3 pages. Yes, 3 pages!
Within these pages were a series of bullet points that I found very interesting and it made me wonder how much franchising had actually changed since 1979, and if the changes have improved franchising today. Read the bullet points below and you be the judge.
- While there are no federal laws governing franchising, most states have franchise laws. Get a copy of the law in your state and read it for degree of stringency and coverage. If it is a tough law and a franchising company qualifies to do business in your state, you have one measure of security.
- Don’t believe that acceptance of you by a franchiser means they have evaluated your ability to get the job done. Some franchisers would select a corpse if rigor mortis had not set in and if it clutched in its hand a certified check for the amount of the franchise fee. Do your own introspection and decide if you can handle the franchise.
- Do not deal with profit projections or average profits. Insist on actual financial statements from a cross-section of franchisees. Then, evaluate your expected return on investment.
- Get the financial statement of the parent company and evaluate its ability to provide the services it promises.
- Read the franchise contract. It should be simple, frank, and fair, with complete disclosure, not an instrument of repression. After you think it through with your head, listen to your gut and determine if the contract fits you.
- Finally, and perhaps most important of all, is evaluation of the franchiser’s management team. You should do this from two aspects – their management ability and their humanness. If the management does not measure up to good corporate standards, you will not get the profits you seek. You may turn out okay, but they can bring you down.
Well, it’s no wonder that many individuals had a distaste for franchising. I cringed at some of the statements implying unfairness and deceit, along with an apparent free-wheeling approach to franchising. On the other hand, some of the advice was sound and still applies today.
It’s obvious franchising has changed, and for the better. But, are some of the negatives that’s were stated (or implied) above, still actually cause for concern within franchise organizations today?
I wonder what future generations will think about franchising when they discover some of today’s book and articles on the subject?
Yes, you be the judge…
*By the way, the author is listed as having several advanced degrees in business and psychology, and was a professor at a leading California university. He is also credited with developing several successful companies including a multi-million dollar franchising chain!
As I often do on the weekends, I was searching through my personal library seeking out a book or two that might provide me some inspiration for an article or report, and this weekend, I came across a business book that was published back in 1979. The book, “Free Yourself in a Business of Your Own” by Byron Lane, caught my eye for reasons I cannot really explain. Obviously, I’ve had it in my possession for many years, yet, never opened it again since I purchased it for $1.29 at Target. It must have been a clearance book as the cover price was $5.95. Anyway, I can’t even recall seeing it when I routinely search through my library. It’s like it suddenly jumped out front and center and said, “Hey, look here!”
Well, I decided to look through the book because the back cover stated, “This book is about freedom. Freedom from an 8 to 5 regimen. Freedom from dehumanizing democracies. Freedom from job boredom. Freedom from the lock-step culture. Freedom to do your work your way.” Hmmm… not much seems to have changed although lock-step culture is not one I’ve heard of before.
Right away, my thoughts turned to franchising and I began to think about what franchising was like back in 1979. Fortunately, I didn’t have to think very hard, as to my surprise, was a chapter on franchising! It’s placement was to present franchising strictly as an alternative to other forms of business ownership, and in a book with 174 pages, the franchising chapter comprised all of 3 pages. Yes, 3 pages!
Within these pages were a series of bullet points that I found very interesting and it made me wonder how much franchising had actually changed since 1979, and if the changes have improved franchising today. Read the bullet points below and you be the judge.
- While there are no federal laws governing franchising, most states have franchise laws. Get a copy of the law in your state and read it for degree of stringency and coverage. If it is a tough law and a franchising company qualifies to do business in your state, you have one measure of security.
- Don’t believe that acceptance of you by a franchiser means they have evaluated your ability to get the job done. Some franchisers would select a corpse if rigor mortis had not set in and if it clutched in its hand a certified check for the amount of the franchise fee. Do your own introspection and decide if you can handle the franchise.
- Do not deal with profit projections or average profits. Insist on actual financial statements from a cross-section of franchisees. Then, evaluate your expected return on investment.
- Get the financial statement of the parent company and evaluate its ability to provide the services it promises.
- Read the franchise contract. It should be simple, frank, and fair, with complete disclosure, not an instrument of repression. After you think it through with your head, listen to your gut and determine if the contract fits you.
- Finally, and perhaps most important of all, is evaluation of the franchiser’s management team. You should do this from two aspects – their management ability and their humanness. If the management does not measure up to good corporate standards, you will not get the profits you seek. You may turn out okay, but they can bring you down.
Well, it’s no wonder that many individuals had a distaste for franchising. I cringed at some of the statements implying unfairness and deceit, along with an apparent free-wheeling approach to franchising. On the other hand, some of the advice was sound and still applies today.
It’s obvious franchising has changed, and for the better. But, are some of the negatives that’s were stated (or implied) above, still actually cause for concern within franchise organizations today?
I wonder what future generations will think about franchising when they discover some of today’s book and articles on the subject?
Yes, you be the judge…
*By the way, the author is listed as having several advanced degrees in business and psychology, and was a professor at a leading California university. He is also credited with developing several successful companies including a multi-million dollar franchising chain!
Thursday, December 10, 2009
Is Owning A Franchise Right For You?
By John Henning at OpenAFranchise.com
——————-
What is a Franchise?
Franchising refers to the methods of practicing and using a specific business philosophy or system. The Franchisor, or Home Office, grants the franchise operator, the franchisee, the right to distribute its products, services, techniques, and trademarks for a percentage of sales, commonly called a royalty fee.
Various services are provided by the franchisor, such as: advertising, training, startup assistance and other ongoing support. A Franchise License is awarded by the franchisor to the franchisee. This written agreement forms the foundation for the relationship between the 2 parties and clearly outlines their responsibilities to each other. The Franchise License usually lasts between 5 & 25 years.
What is the best Franchise?
As a Franchise Consultant I get asked this question on a daily basis. I work with clients to help them find the right franchise and through those conversations they almost always as me: “What is the Best Franchise?”. There is no single answer for this question as the answer truly depends on the criteria you set as a perspective franchise owner. Meaning, maybe you want a retail location with 5 employees that makes $50k/yr, or maybe you want a home based business that has zero employees and makes $150k/yr. Either way, the word “best” becomes relative to what is important to you.
I realized quite some time ago that I could never “sell” a franchise to anyone. The only way someone will buy a franchise is if it makes sense for them & their family. Performing the proper due diligence is key to finding the best franchise for you.
How much does a Franchise Cost?
The total up front cost for a Franchise will vary between $30k & $100k. This is cash you must have prior to any financing options. You should also have a credit score of at least 700.
Most of the up front cost for a Franchise is the Franchise License Fee. This fee will vary between $20k & $50k. The Franchise License Fee covers your training, startup assistance and usually your protected territory.
The total cost of a Franchise will usually vary between $30k & $500k with the average total investment being around $250k. Financing is available for the balance of the Franchise cost depending on your credit score and the Franchise Company’s rate of success. A good rule of thumb is to have at least 30% of the total investment in cash.
For example, for a Franchise with a total investment of $250k, you would need approximately $60k in cash prior to any financing. This cash can come from savings, home equity, 401k, Retirement, Partners etc…
Some common factors that influence the startup costs are;
- Age of the franchise
- Number of franchises
- Responsibilities of each party
- Name brand recognition
- The service
- The product
- Length of term
- Finance Terms
- Real Estate Costs
- Many other factors
Why buy a Franchise?
Most people purchase a Franchise for one of two reasons.
#1. Reduce their risk. Quicker startup times, faster break even points & ongoing help after startup. All of these things help reduce the risk of starting a business.
#2. They don’t want to create a system, they want to use someone else’s program, not reinvent the wheel. The Franchise’s System is the main component of what you are buying when you buy a Franchise.
How much can I make with a Franchise?
Another one of the many questions I get asked on a regular basis is: “How Much Can I Make?”. This is an important question regardless of the type of Franchise you are exploring. The simple answer is: I can’t tell you.
Franchising is regulated by the FTC. The FTC does not allow a Franchise Company or Franchise Consultant to make an earnings claim unless those earnings are published in their Franchise Disclosure Documents or FDD. Most companies don’t post those numbers for legal liability reasons.
However, this is still a very important question that you need to know the answer to prior to buying a Franchise. The real answer is: No one can tell you how much YOU are going to make, because the biggest determining factor in that equation is YOU. However, you are able to get a feel for what the potential of a particular franchise might be by talking to existing franchise owners that already own that same franchise in another area. This is part of the due diligence process that we help our clients through.
What should I look for in a Franchise?
When researching any Franchise, you should look for some key factors. This list is by no means an exhaustive list. There are many more things you could look for too, depending on what is important to you.
- How long have they been in business?
- How many franchises do they have?
- What are my responsibilities as a franchise owner?
- What are the franchisor’s responsibilities?
- Where is the industry now? Where was it 5 yrs ago? Where will it be in 5 yrs?
- How many franchises have failed? And why?
- Do they make an earnings claim in their FDD?
- How many home office employees are there?
- Is the franchise organization expanding, stagnant or shrinking?
- Do I get a protected territory or name brand to use?
- How often do you hold training & where is it held?
- What are the average gross revenues per unit nationwide?
- Did they start as a Franchise or as a business and expand through franchising?
These are just a few of the questions to talk about when researching a Franchise. There is a free eBook on franchising that is published by the FTC: A Consumer Guide to Buying A Franchise, you can download it for free here: EbookOnFranchising.com
Summary/Closing
As you start your entrepreneurial search for a franchise, make sure to perform the proper due diligence, talk to existing franchise owners, visit the home office, talk to a lawyer, and work with an experienced franchise consultant. A good franchise consultant can help you find the right franchise by making sure you get the information you need on each franchise.
###
John Henning is a Franchise Consultant based in Pottstown, Pa. John’s company: OpenAFranchise.com helps people find the right franchise by helping them through the discovery & research process. With over 5000 Franchises & business opportunities out there, John & his team help guide clients to the right information on each company.
——————-
What is a Franchise?
Franchising refers to the methods of practicing and using a specific business philosophy or system. The Franchisor, or Home Office, grants the franchise operator, the franchisee, the right to distribute its products, services, techniques, and trademarks for a percentage of sales, commonly called a royalty fee.
Various services are provided by the franchisor, such as: advertising, training, startup assistance and other ongoing support. A Franchise License is awarded by the franchisor to the franchisee. This written agreement forms the foundation for the relationship between the 2 parties and clearly outlines their responsibilities to each other. The Franchise License usually lasts between 5 & 25 years.
What is the best Franchise?
As a Franchise Consultant I get asked this question on a daily basis. I work with clients to help them find the right franchise and through those conversations they almost always as me: “What is the Best Franchise?”. There is no single answer for this question as the answer truly depends on the criteria you set as a perspective franchise owner. Meaning, maybe you want a retail location with 5 employees that makes $50k/yr, or maybe you want a home based business that has zero employees and makes $150k/yr. Either way, the word “best” becomes relative to what is important to you.
I realized quite some time ago that I could never “sell” a franchise to anyone. The only way someone will buy a franchise is if it makes sense for them & their family. Performing the proper due diligence is key to finding the best franchise for you.
How much does a Franchise Cost?
The total up front cost for a Franchise will vary between $30k & $100k. This is cash you must have prior to any financing options. You should also have a credit score of at least 700.
Most of the up front cost for a Franchise is the Franchise License Fee. This fee will vary between $20k & $50k. The Franchise License Fee covers your training, startup assistance and usually your protected territory.
The total cost of a Franchise will usually vary between $30k & $500k with the average total investment being around $250k. Financing is available for the balance of the Franchise cost depending on your credit score and the Franchise Company’s rate of success. A good rule of thumb is to have at least 30% of the total investment in cash.
For example, for a Franchise with a total investment of $250k, you would need approximately $60k in cash prior to any financing. This cash can come from savings, home equity, 401k, Retirement, Partners etc…
Some common factors that influence the startup costs are;
- Age of the franchise
- Number of franchises
- Responsibilities of each party
- Name brand recognition
- The service
- The product
- Length of term
- Finance Terms
- Real Estate Costs
- Many other factors
Why buy a Franchise?
Most people purchase a Franchise for one of two reasons.
#1. Reduce their risk. Quicker startup times, faster break even points & ongoing help after startup. All of these things help reduce the risk of starting a business.
#2. They don’t want to create a system, they want to use someone else’s program, not reinvent the wheel. The Franchise’s System is the main component of what you are buying when you buy a Franchise.
How much can I make with a Franchise?
Another one of the many questions I get asked on a regular basis is: “How Much Can I Make?”. This is an important question regardless of the type of Franchise you are exploring. The simple answer is: I can’t tell you.
Franchising is regulated by the FTC. The FTC does not allow a Franchise Company or Franchise Consultant to make an earnings claim unless those earnings are published in their Franchise Disclosure Documents or FDD. Most companies don’t post those numbers for legal liability reasons.
However, this is still a very important question that you need to know the answer to prior to buying a Franchise. The real answer is: No one can tell you how much YOU are going to make, because the biggest determining factor in that equation is YOU. However, you are able to get a feel for what the potential of a particular franchise might be by talking to existing franchise owners that already own that same franchise in another area. This is part of the due diligence process that we help our clients through.
What should I look for in a Franchise?
When researching any Franchise, you should look for some key factors. This list is by no means an exhaustive list. There are many more things you could look for too, depending on what is important to you.
- How long have they been in business?
- How many franchises do they have?
- What are my responsibilities as a franchise owner?
- What are the franchisor’s responsibilities?
- Where is the industry now? Where was it 5 yrs ago? Where will it be in 5 yrs?
- How many franchises have failed? And why?
- Do they make an earnings claim in their FDD?
- How many home office employees are there?
- Is the franchise organization expanding, stagnant or shrinking?
- Do I get a protected territory or name brand to use?
- How often do you hold training & where is it held?
- What are the average gross revenues per unit nationwide?
- Did they start as a Franchise or as a business and expand through franchising?
These are just a few of the questions to talk about when researching a Franchise. There is a free eBook on franchising that is published by the FTC: A Consumer Guide to Buying A Franchise, you can download it for free here: EbookOnFranchising.com
Summary/Closing
As you start your entrepreneurial search for a franchise, make sure to perform the proper due diligence, talk to existing franchise owners, visit the home office, talk to a lawyer, and work with an experienced franchise consultant. A good franchise consultant can help you find the right franchise by making sure you get the information you need on each franchise.
###
John Henning is a Franchise Consultant based in Pottstown, Pa. John’s company: OpenAFranchise.com helps people find the right franchise by helping them through the discovery & research process. With over 5000 Franchises & business opportunities out there, John & his team help guide clients to the right information on each company.
Indian retail sector to be $410-bn by fiscal-end: Assocham
NEW DELHI: The Indian retail market is expected to reach $410 billion by the end of the current fiscal, according to the Associated Chambers of Commerce and Industry of India (Assocham).
Another report on India’s retail market released here late last month had made similar projections, saying the sector was expected to reach $535 billion by 2013.
“With anticipated $30 billion fresh investment over the next five years, modern retail will show impressive compound annual growth rate of 40 percent,” said the Fashion and Lifestyle Franchise Report 2009-10.
“With this growth rate, the market is expected to reach $535 billion by 2013,” added the report compiled by Franchise India Holding Ltd, a franchise solutions provider.
As per the Assocham study released on Monday, the retail sector is estimated to grow 5.5 per cent to become $410 billion market by April 2010, registering growths of more than 22 per cent and 30 per cent in the third and fourth quarters this fiscal.
The study noted that the share of retail trade in the country’s gross domestic product (GDP) was between 8-10 per cent in 2007.
With strides of development in the organized retail segment, its share has now risen to 12 per cent, Assocham said.
Also, organised retail, which currently accounts for nearly five per cent of the retail market, is pegged at around $9.23 billion and was expected to grow at 2.3 per cent to touch $13 billion by the end of this financial year.
“Retail sector is witnessing exponential growth with development taking place not only in major cities and metros but even in tier-II and tier-III cities in India,” said Assocham president Swati Piramal in a statement.
Source: http://retail-guru.com/indian-retail-sector-to-be-410-bn-by-fiscal-end-assocham/
Another report on India’s retail market released here late last month had made similar projections, saying the sector was expected to reach $535 billion by 2013.
“With anticipated $30 billion fresh investment over the next five years, modern retail will show impressive compound annual growth rate of 40 percent,” said the Fashion and Lifestyle Franchise Report 2009-10.
“With this growth rate, the market is expected to reach $535 billion by 2013,” added the report compiled by Franchise India Holding Ltd, a franchise solutions provider.
As per the Assocham study released on Monday, the retail sector is estimated to grow 5.5 per cent to become $410 billion market by April 2010, registering growths of more than 22 per cent and 30 per cent in the third and fourth quarters this fiscal.
The study noted that the share of retail trade in the country’s gross domestic product (GDP) was between 8-10 per cent in 2007.
With strides of development in the organized retail segment, its share has now risen to 12 per cent, Assocham said.
Also, organised retail, which currently accounts for nearly five per cent of the retail market, is pegged at around $9.23 billion and was expected to grow at 2.3 per cent to touch $13 billion by the end of this financial year.
“Retail sector is witnessing exponential growth with development taking place not only in major cities and metros but even in tier-II and tier-III cities in India,” said Assocham president Swati Piramal in a statement.
Source: http://retail-guru.com/indian-retail-sector-to-be-410-bn-by-fiscal-end-assocham/
Sunday, October 11, 2009
Franchises' easy path to ownership has costs
by Jeff Cornwall
Franchising is a path to business ownership that many of today's accidental entrepreneurs find appealing.
"For those in career transition who are considering business ownership, franchising may be a viable option, primarily because most have spent their entire career in corporate America and are used to structure and following processes," says Dan Aronoff, Nashville franchise consultant with FranNet.
"Franchising provides that structure through well-established and proven systems. For the right person and right fit, following the franchise's 'recipe' can lead to success. Why reinvent the wheel if you don't have to."
One of the downsides of buying a franchise, though, is that many require that the entrepreneur put up a significant amount of funding to start the business. However, many franchises may be eligible for Small Business Administration loan programs, too. Here is a Web site that offers more details: franchiseregistry.com/registry.
Just like any new venture, developing a business plan is a must. It's essential to determine the feasibility within the local market where you plan to open the franchise. Make sure that you temper any financial projections with current economic conditions. Be realistic.
Also, look for franchise opportunities that create value for the customer, as this will be the best business model for some time to come.
There are some sticky contracting issues with buying any franchise. Make sure to work with an attorney who has experience in that arena.
Monthly fees add up
One of the biggest sources of frustration among franchisees is that, over time, they begin to perceive that the value added provided from the franchisor or the parent company becomes less valuable.
A franchise will charge a significant monthly percentage fee (this typically ranges from 4 percent to
7 percent of sales).
This fee covers business systems, marketing support, purchasing power for inventory, and so forth. As they gain experience in the business, many franchisees believe that they can be at least as effective on their own without the support of the franchisor.
Another concern expressed by franchisees is that with all sorts of rules and standardized procedures, they tend to feel more like an employee than a business owner. Those who try to break away from the predetermined model can face the wrath of the franchisor. Larger franchisors have entire staffs dedicated to franchisee compliance.
Source: http://www.tennessean.com/article/20091011/BUSINESS01/910110340/2047/BUSINESS/Franchises++easy+path+to+ownership+has+costs
Franchising is a path to business ownership that many of today's accidental entrepreneurs find appealing.
"For those in career transition who are considering business ownership, franchising may be a viable option, primarily because most have spent their entire career in corporate America and are used to structure and following processes," says Dan Aronoff, Nashville franchise consultant with FranNet.
"Franchising provides that structure through well-established and proven systems. For the right person and right fit, following the franchise's 'recipe' can lead to success. Why reinvent the wheel if you don't have to."
One of the downsides of buying a franchise, though, is that many require that the entrepreneur put up a significant amount of funding to start the business. However, many franchises may be eligible for Small Business Administration loan programs, too. Here is a Web site that offers more details: franchiseregistry.com/registry.
Just like any new venture, developing a business plan is a must. It's essential to determine the feasibility within the local market where you plan to open the franchise. Make sure that you temper any financial projections with current economic conditions. Be realistic.
Also, look for franchise opportunities that create value for the customer, as this will be the best business model for some time to come.
There are some sticky contracting issues with buying any franchise. Make sure to work with an attorney who has experience in that arena.
Monthly fees add up
One of the biggest sources of frustration among franchisees is that, over time, they begin to perceive that the value added provided from the franchisor or the parent company becomes less valuable.
A franchise will charge a significant monthly percentage fee (this typically ranges from 4 percent to
7 percent of sales).
This fee covers business systems, marketing support, purchasing power for inventory, and so forth. As they gain experience in the business, many franchisees believe that they can be at least as effective on their own without the support of the franchisor.
Another concern expressed by franchisees is that with all sorts of rules and standardized procedures, they tend to feel more like an employee than a business owner. Those who try to break away from the predetermined model can face the wrath of the franchisor. Larger franchisors have entire staffs dedicated to franchisee compliance.
Source: http://www.tennessean.com/article/20091011/BUSINESS01/910110340/2047/BUSINESS/Franchises++easy+path+to+ownership+has+costs
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