Franchising: Pros and Cons. Buying a Franchise Versus Starting from Zero

One of the first questions you should answer before starting a business is if you get to have a small independent company or buying a franchise.

Each option has its own advantages and disadvantages, The type of business you choose depends on a unique set of circumstances.

Let us first see what Wikipedia says on this form:

"The franchise is a type of contract used in commerce on the one hand call to another call franchiser gives the franchisee a trademark license as well as methods of doing business in exchange for a periodic fee or royalty.

The relief is to build on the experience an entrepreneur who has achieved a remarkable competitive advantage in the marketplace. That advantage may consist of a prestigious brand, products or patented methods or simply a deep understanding of the business that makes it knows the formula of profit.

Through the franchise agreement, The franchiser agrees to convey some of these values to the franchisee and it achieves a significant reduction in investment requirements and risk. "

Before making a decision Investigates the options available and reduces the alternatives. After talking to some franchisees, current and past (after all, who retired from a business has interesting things to say that might open your eyes ...).

Consider the following questions

Why would you want to start a business?

Is it because you want to be your own or head / e? If you want total control of your business, then the franchise probably is not your thing. A franchise sets the rules and guidelines you must follow.

The policies imposed on the franchisee may include: suppliers, the form of advertising, the rate of gain and even the hours of operation and, of course, everything related to the ambience of the place, the form of attention, and so on.

Looking for guidance on how to start a business and keep it running?

A franchisor has taken the time and effort to develop a successful business model. It is a proven system that works in different locations in the country of origin and often also in others. The franchisor may provide you with information to start the business, training and awareness. Because people are familiar with the franchise, it will take less time to build a customer base to develop an independent business.

Want to decide your own rates for your service or product?

A franchise will most likely dictate the rates of services and dial up the type of services or products you can offer. If you want to expand your offering beyond their guide, a franchise may not be your best option.

Do you feel comfortable or trained employees and maintaining all required documentation?
Since a franchise is an established business model, it will provide you with training materials for your employees. The company will tell you what kind of training each employee should take and what kind of documentation you carry and store. A franchisor quite possibly of all descriptions of each job and a guide on wages to offer.

Do you know where to buy your supplies at a good price?

A franchise agreement may impose the type of supplies and equipment to use in business. As the franchisee buys a large scale, hopefully you can get supplies and equipment at great prices. But keep in mind that may be required to buy supplies and equipment to certain companies that will not allow you to enjoy quantity discounts and / or special promotions from other suppliers.
Are you willing / or pay a portion of your monthly income to someone else?

Trade agreements differ from one franchise to another, But most will ask you to make an initial investment plus a percentage of your income to the franchisor. Moreover, in many cases there are mandatory advertising fees to cover costs of advertising campaigns. When you converse with other franchisees be sure to ask if they feel they get

Do you have the marketing skills to promote your business?

Self-employed persons are responsible for everything related to marketing, from: have business cards, a web site to support the business, promotional material (brochures, flyers, etc..), Local media advertising, campaigns, promotions, etc..

Do you have a specific location for your business?

A franchise will surely determine the amount of business in a particular area. So you'll probably allocate a territory to work.

Remember, a franchise is a model ready to operate, Will support you have your business running as soon as possible without reinventing the wheel. " However, a franchise has rules and procedures you must follow and, in some ways, dictate what you can not do with your business.

The way you want to develop your business should guide you to determine if you want an independent business or if you want a local branch of a national or international franchise.