December 17, 2010

Advice for Buying or Starting a Franchise

At times it can be hard to feel like you have control over your own life – your own destiny.

Many times we would just like to be our own boss, live the American Dream, and start our own business.  At the same time, the many downsides of owning a business, and fear of failure can hold us gripped in stagnancy.

If you want the safety of an established track record, a good way to start out is to buy a franchise. Franchise purchases give you the right to sell the products or services of an established company. But as with any venture, there are things to be wary of as well. Here are some points to consider when buying a franchise.

Before spending your hard earned money on a venture you have to really do your research, and look into the potential franchise.  Talk to other owners, understand the franchise disclosure document, spend a day at the main office, and ask questions.

When choosing a franchise, try to find a franchise that deals with things you yourself enjoys.  Be fully aware with what kind of are you are dealing with, your management abilities, and the goals that you wish to achieve.

If you are working with a big franchise, you can use the companies already established resources to help you get started with marketing campaigns, etc.  Some companies may or may not include the cost of training.

If you are working for a well known company, customers are already familiar with the company’s name and products, so business will build faster.

There are Franchise Opportunities in nearly every industry sector from ice cream to fitness.

This varies with each business.  There is always some initial cost, and royalties to account for.  Also many companies will take a different share of the profits, typically between 6-10 %.  If the franchise requires a building, than puying that space can be a huge cost.  Home franchises avoid the cost of purchasing space and offer a nice tax break.

Some franchises give you the independence to make business decisions. Others keep a tight lock on all the details.  Make sure you exactly what your authority will be.

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