BUSINESS FRANCHISE- A short cut to viable venture
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A Recent business survey worldwide has reflected a steady rise in the number of people leaving full-time employment to
start up their own business.
The proportion of people setting up their business all over the world has increased immensely over the last four years. This trend is fast becoming a prominent feature as we live in a world where people have continued to reflect their entrepreneurial skills. Hence, the result of the above survey is not particularly starting. What is startling though, is the huge gap between individuals who more times than often have financial capital start-up, but do not have the necessary ideas and those armed with wells of ideas and skills about profitable businesses, yet lacking so greatly in financial capital. Whichever way you look at it, starting up a business, can either be a daunting or interesting task depending on the depth of your research and what resources you might have at your disposal. Business Franchise has been proven to be readily and quickly created, with little or minimal risk i.comparism to other business ventures. They also offer a very real an.complete solution to the pressing problem of lack of skill or huge financial capital required to
start up a business. Franchising can be best described as a marketing instituted way of distribution in which a person, the franchisor, grants a license or a franchise to another person, the franchisee, which allows the franchisee to use the Franchisor's trade marks, trade name and business strategy in accruement for an initial payment and further payments. Four major factors you may need considered before going into franchising:
Capital Outlay: Like any other conventional business, the most input variable to consider in a franchise is the financial outlay. The initial financial investment needed to enter into a franchising business varies between $3500 and $200,000 depending on the scale and type of franchising you are interested in. This basically represent.compensation to the franchisor for upfront costs incurred in developing the franchise and may include training materials, manuals, set-up, and start-up and promotional launches. There is also a separate start-up cost for fittings, fixtures and stocks depending on the type business you are starting. Catering and printing require heavy equipment and are therefore more expensive than a molly maid home cleaning service. The starting up cost of a small sandwich bar is considerably much cheaper than the
start up cost of a McDonalds Restaurant.
Source of Finance: You should carefully consider your source of finance, as each one will have a cost. An example , the cost of using savings is the
Opportunity cost lost in placing the money in alternative investments. If you decide to remortgage you house at a lower rate of interest than th.commercial rates, it may be worthwhile bearing in mind that you may lose your home if the business does not succeed. Bank can offer you small size loans, but may require some sort of security for larger amounts. This can be in the form of your home and other personal assets. It is always a good idea to visit any major high street bank and speak with someone in the franchising unit for further help with finance. However, as with any business start-up, you should also take independent objective advice since you will be making significant investment of funds.
Viability: You need to carry out a thorough research, extract as much information as you possibly can from the franchisor and through a search at the registrar o.companies. Other sources of valuable information are existing franchisees. The franchisor should provide you with you with a list of franchisees, it might be worth your while to go have a word with them. To assess any franchise chance, it is necessary to first identify the advantages and disadvantages of Franchising to enable you put the relationship and its legal form into proper perspective.
Advantages of Franchising o Franchiser's training program to help you overcome your lack of basic or specialized knowledge. o Incentive of owning
Your business o The use of a business name that is well established with the public. o Benefit of maximum market information and experience already assembled. o Services of troubleshooters to assist you with problems that may arise from time to time. o Territorial guarantee that n.competitive franchise is set up in .competing business within a defined area around your franchise. o Assisting with site selection and purchase of stock o Help in getting the business started and running smoothly, including staff training.
Before you make that decision to join a franchise, it is important to ensure that you are doing what you want to do. Most successful business entrepreneurs always attribute their success to hard work and dedication. Be prepared to put in your best. You should also make sure you have the agreement and support of your family as they may be affected by your decision to go into business. While franchising is safer than many other types of business entities, it is worth remembering that you have to put in your best.
