A franchise is a legal, commercial relationship, between the owner of a trademark, service mark, trade name or advertising symbol, and an investor. Its use is authorized by a parent company or a franchiser to sell their goods and/or services in a retail space or a designated geographical territory. Let’s cover some of the matters surrounding a franchise business that you should be aware of.
Why Consider A Franchise?
– 1 out 8 businesses is a franchise
– They have widely recognized brand names that people trust
– They have a proven business system
– They have a successful system of training
– There are over 3,000 franchise concepts implemented in the U.S.
What Do You Need to Start a Franchise?
A Business Plan
This document serves as a road map for you to follow throughout the life of your business. It will require adjustments along the way but it will keep you on track as far as your day-to-day operations, future goals and other areas of your business are concerned.
Research the required initial financial investment for your desired franchise project to determine what amount you will need to start. You will need seed money not only to start but to operate and grow your business. Whether you invest it all on your own or get help from investors outside of your business, this is a crucial area for you to manage. You must be sure to raise a sufficient amount of capital so that you don’t wind up shutting down your business prematurely.
You must have a deep commitment to the mission of your business and must set goals to help you accomplish your mission. You must take a die-hard approach to running your operation because it will take a while before you make a profit. It can take anywhere from 3 – 5 years to be truly profitable. so you will have to dig in. It will also be a good idea to involve only others who share this same kind of commitment in your franchise.
Know The Type of Franchise You Want to Establish
There are multiple types of franchise operations that you can select but be sure that you choose wisely. You should focus on what you love doing and what you have the capacity to operate and support financially. Some of the general categories that you have to select from are: Car Wash, Convenience Stores, Restaurants, Gas Stations, Toy Stores and others.
What Should You Look For In a Franchise Parent Company?
– An established successful business that has been in operation for a long time
– On-going help and comprehensive training that shows you how to effectively manage the business
– Owners that pay a percentage of the advertising costs
– A business that others have heard about and are aware of its standards
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