It is the franchising business for me?

Many people are familiar with the concept of franchise or franchising.

The franchise concept

The franchise is a type of contract used in commerce by which a called party gives to another call franchiser franchisee License a brand and methods of doing business in exchange for a periodic fee or royalty. The relief is to build on the experience of a businessman / woman who has achieved competitive advantage outstanding in the market.

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.

Sometimes legal agreements may vary the terms of certain franchise and not correspond exactly with the above definition. Sometimes the methods on how to do business can not be part of the franchise or other benefits not available to other franchises offer. Each case is unique and therefore it is necessary to look at the documentation for certain what it offers (and what you ask) the franchiser.

The franchises are known by the public food chains like McDonald's which today offers some relief strategies to attract a wider consumer market.

McDonald's became a household name after he was able to achieve greater consumer market that is not only limited to the United States and the Americas but also the rest of the world. The company behind this success is due precisely to the franchise system. Apart from renting the premises to the franchisee, also has a sales and cost of supplies charged to the franchisee.

For the quality of food served at each location is consistent throughout the chain, McDonald's sent to each member of the franchise to its Hamburger University in Oak Brook, Illinois.
As with any business, there are advantages and disadvantages of franchising offers to all who wish to venture into this business model.

Advantages of franchising

Popular brands are well known and are more likely to sell. It is selling a "tag" well known to a market of consumers who know the product very well.

No need to develop a new product that has not been sufficiently investigated.
In contrast, venture into a franchise allows the franchisee to access information on the franchiser has an existing product and operate a proven business in a short period of time.

The franchiser provides its franchisees training and seminars on the product in question. It will be easier for the franchisee to operate and manage the business as it has available training and other support provided by the franchiser.

Disadvantages of franchising

The high standards of the franchiser increase maintenance costs of the franchise. Because the franchiser's standards will inevitably be high, sometimes the cost of keeping a franchise can be increased, unless the materials are second quality and low cost.

The development of new products may need approval by the franchiser. If the franchisee would like to add a product you think would be salable in your market range, the new product must first be approved by the franchiser and this can take time and be rejected if it meets the standards of the brand.

The benefit is limited given that the franchiser has an interest in general about the benefits of the franchise. Not only the franchisee has little control over the franchise (because there are many interests at stake) but also the benefit of the franchise will be divided between the two parties. Therefore, there is a limit to what the franchisee can earn.

Even if the franchises have several disadvantages, this business model also has significant advantages. If you think you can handle this type of business, all I can say is that every business has its risks that you must evaluate.

In virtually every industry you choose there are several major players offering franchising its business model. Analyze it thoroughly and see the terms of a lawyer / a specialist on the subject. And if you can, Talk to other franchisees of the chain shortlisted the people already in business can provide important details that might tip the balance in favor or against.