Archive for March, 2011

What about Low-Cost Franchises

If you are looking at getting into a franchise then hopefully you have done some research about the franchise marketplace. Getting into a franchise is not much different from getting into your own business except for the fact that you will never own that franchise. It will still cost you money out of pocket and it will take some time to get up and running. This does not matter whether it’s low-cost franchises or a mid-market franchises.

There is no real dollar amount threshold that determines or defines low-cost franchises. If one were to propose a definition then it would be at some point below a mid-market franchise of a business that requires a significant investment and a lot of business attention like a national restaurant chain franchise or a large truck stop franchise. So at some level below that would be the low-cost franchises market. This might be a smaller regional or more local chain. It certainly would not be one of the very large international hotel franchises or a large national hospital franchise.

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A Franchise Business Opportunity Vs an Internet Marketing Business: You Be the Judge!

These days many new entrepreneurs want a business that can provide them with flexible hours, being their own boss, having more free time and making the big bucks. That is why most entrepreneurs prefer to start a franchise style business, such as a Subway or McDonalds. A franchise business opportunity gives an entrepreneur a chance to try to be his own boss and add more free time to their schedule. However, starting a franchised business is a daunting task because it requires a huge up front investment and a lot of personal time. Most franchises don’t see a profit until there 5 year anniversary, if it lasts that long. One should really consider the risks before becoming a franchiser.

The risks of buying a franchise opportunity are there will be rules that must be adhered to in regards to how you run your business. In fact, most franchise agreements have stipulations that the franchisee gives. You have to play by their rules, what location is best, the size of the location, restrictions on autonomy because you’re buying the rights to participate in a system and more. You will have to pay huge up front costs and franchise fees for the whole time your business is up. You will need to know if buying a business franchise opportunity is the right course of action for you. Most franchise agreements are for ten year terms. This locks you in even if you fail. Some other disadvantages are high overhead, Workers Compensation, insurance on the property, hiring and firing. When all is said and done, financing is one of the most confusing, and often frustrating, aspects of opening a franchise. You also need to run marketing campaigns that are approved by the franchisee. There is a lot of money and time spent only to see if you make it past 5 years. Most franchise owners spend 60-80 hours a week running their businesses. The hope of adding free time is a distant memory. The only thing that you have added is a higher stress level. What if you don’t make it? How much debt will you be in if you fail? Putting up a franchise business is more costly than putting up an online business.

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