Do
You Really Want to Own a Franchise?
No
matter what job you have, there
are probably days when you've
just had it with excessive demands
on your time, conflicts with coworkers
or company policies, and pay raises
that barely keep up with inflation.
At that point, you may start thinking
about being your own boss-realizing
the American dream of owning your
own business.
You
may have thought about buying
a franchise. In this business
arrangement, a franchisor
(the parent company) sells the
franchisee (you) the right
to sell its goods or services
in exchange for a franchise fee.
It might seem like just what you
need to make a big change in your
career and your life. After all,
everyone already knows about Meineke
Muffler, Subway, Dunkin' Donuts,
Stanley Steemer, and hundreds
of other businesses that have
made the roads going through most
of America's towns and cities
look pretty much alike these days.
As a franchisee, you'd have the
advantage of being able to use
the company's name, recognizable
storefront, and trade secrets.
And you've heard that franchise
fees for some businesses run as
low as $10,000.
But
do you really know what's involved
in a franchise agreement and in
running a franchised business?
There is much more to it than
paying the franchise fee and opening
the doors. While fees may seem
fairly reasonable (the majority
are under $40,000), that's only
the beginning. You will need an
upfront investment that amounts
to much more than the franchise
fee. For example, survey results
in the article "Annual Franchising
Industry Overview" ( Bond's
Franchise Guides) showed an
average of $27,300 for a motel
franchise-but estimated start-up
capital or line of credit was
$6,600,000. Even a smaller-scale
business category-say, a shop
that sells donuts, cookies, or
bagels-carries an average franchise
fee of $24,676 with estimated
startup capital at $261,165. In
addition, most franchisors have
requirements for your personal
net worth.
Owning
a franchise is not easy, and anyone
who goes into one believing that
the business will run itself is
destined for failure. It carries
a lot of responsibilities. In
fact, you may feel that you're
still working for someone else
once you learn about the restrictions,
requirements, and specifications
that will be imposed on you by
the franchisor. You will need
to unerringly follow their practices
and meet their standards, and
you will sign a contract that
says so.
The
contract will also spell out what
happens if you want out or can't
make a go of the business. Some
franchisors specify in their contracts
that even if you are running the
business as a corporation, you
and your spouse can be sued as
individuals. You'll want to hire
an attorney to carefully check
the whole contract over before
you sign anything. You'll also
need an attorney to help you obtain
the business licenses you will
need. If you will be selling food
to the public, you'll need a license
from the health department, and
you will also need to always be
ready for surprise inspections.
But
let's say you've got enough saved
for the fee, you've got a more-than
solvent net worth, you feel capable
of understanding and taking care
of all the details, and you can
borrow the rest of the money you
need. What could go wrong?
It sounds like a sweet deal, doesn't
it?
That
depends...
|

Do you have enough money
to run the business until
it starts turning a profit?
This means you will have
to pay employees, pay for
product, make payments on
your business loan, and
send the franchisor a monthly
royalty of 4%-8% of total
sales (not of profit), depending
on your contract. Other
initial and ongoing costs
include insurance, employee
training, inventory, equipment,
rent, maintenance of the
site, and your share of
advertising expenses.
Was the franchisor's projection
of your earnings overly
optimistic?
Is your family behind you-even
willing to work with you?
Does everyone realize that
you will be working hard
at the business location
for all the hours it is
open every day, and that
you will be the first one
there in the morning and
the last one to leave at
night? do they realize that
vacations are pretty much
out of the question for
a long time now, and that
even if you manage a weekend
getaway, you're always "on
call"?
How well do you interact
with people? You will be
dealing with employees (some
of them unreliable), customers
(some with complaints),
and your contact people
at the parent company-in
effect, your new bosses.
If things get crazy, can
you keep your cool?
Did you choose a business
that you actually enjoy
and find exciting? Or did
you just buy yourself a
job that has got you trapped
even worse than the one
you left behind?
|
An
Alternative Plan
There is a much less complicated
way to achieve financial independence
and success without jumping on
a franchise rollercoaster that
never stops. We offer a viable,
legitimate way to earn an exceptional
income without the huge investment,
the loss of freedom, or the sacrifice
of time with your family. As a
home-based business owner, you'll
work in the peace, quiet, and
comfort of your own home. You'll
set your own hours. You won't
have employees that drive you
crazy. Instead, you'll work with
a support team that will mentor
you in a professional, respectful
manner.
You
can ditch that going-nowhere
job and be your own boos-without
the hassle of a traditional business.
For free, no-obligation information,
simply fill out the web form.