Archive for December, 2010
Franchise Advantages
Less money is needed to advertise a startup if it has a well-known image and is well thought of by the public. The standard sign will bring the traffic into the business. This is a huge advantage over opening a business with no preconceived feelings for it. A good location with lots of traffic will help to make any known franchise do well since the buying public knows what the company is about and what they offer.
The franchise game plan
Tags: food franchise, franchise advantages, franchise buyer, franchise owner, franchise owners, franchisors, game plan, national franchises, opening a business, true modelRelated posts
Franchise Agreements and Contracts
When looking into purchasing a franchise it’s a good idea to investigate its background with a healthy dose of skepticism. It can be easy to get caught up in the hype of glossy brochures and promises of quick profits, but the reality is that franchisors and their representatives are selling a product and it’s in their best interest to dress it up as attractive as possible. Here are a few areas where you should take a second look.
Claims of Earnings
This is the dollar amount a franchise company provides in their Financial Disclosure Document (FDD), and which can sometimes be very different from the amount quoted to you by a sales person, consultant or broker. It’s important to find out where these numbers are coming from, as some companies may have differing methods of calculating the average gross or net revenues. Some companies may divide their franchises up into top, middle, and bottom earners and then report on separate earnings for each section instead of averaging them out as a whole. Also, some companies calculate their earnings as a gross profit instead of net, which shows a profit number prior to expenses and taxes, which can significantly change the end result.