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Franchising for Corporate Layoffs

With the global economic disruption resulting from the coronavirus pandemic, many established companies have been forced to let go of their employees in order to make ends meet. This has been an extremely unfortunate consequence of the pandemic for many businesses. But for those recently unemployed professional people, there may be an opportunity to transition from a corporate environment of layoffs to an entrepreneurial venture of their own. One way to do this is through franchising, which has become an increasingly popular investment option due to its low risk and unique business opportunities.

The International Franchise Professionals Group (IFPG) is the go-to resource for aspiring entrepreneurs looking to invest in a franchise business. This article examines commonly asked questions from investors intrigued by franchising, particularly from those that have been impacted by corporate layoffs, and provides answers on how to make the best investment plan when buying into a franchise organization.

What is the difference between franchising and regular business ownership?

The main difference between franchising and regular business ownership is that, when starting a business, most of the ideas are coming from a single individual. With franchising, the franchisee has the advantage of purchasing into a larger corporation which already has a successful business model in place – one that is tried and tested. This means that the franchisee can take advantage of numerous resources and shared responsibilities to ensure their business is running smoothly and is as successful as possible.

What are the different types of franchising?

There are three main types of franchising: business format franchising, product and trade-name franchising.

Business format franchising is the most common type of franchising, where a franchisee pays a franchisor a fee in exchange for the right to use the franchisor’s business trademark, operating system, processes, and associated support services. Product and trade-name franchising, on the other hand, is when a franchisee pays a franchisor a fee and has the right to sell the franchisor’s goods or use its trademarks or trade names, in exchange.

What advantages are there to investing in a franchise?

There are a number of advantages that come from franchising. One of the primary advantages is that, as soon as you become a franchisee, you have access to an existing customer base, as well as a slew of other resources, like the franchisor’s support network and marketing materials. You also benefit from having experience and expertise on your side—most of which would be hard to come by if you were starting a business from scratch.

Another benefit to franchising is that, because the franchisor has already created a business plan and system, there is significantly less risk than when starting a business from scratch. This low risk factor gives franchisees more leverage when it comes to negotiating terms and making decisions about their business investments.

What should I consider when choosing a franchise?

When researching franchise opportunities, it’s important to consider factors such as the level of franchisor support and the timeline in which you would expect to make your investment back. It’s also important to consider the long-term implications of investing in a franchise, such as the potential to open more stores in the future, and the possibility of selling your franchise in the future. Lastly, you should assess whether the franchise’s industry is in decline or growing, to determine how long it may take for your franchise to be successful.

Topics:

Franchising,

Investment,

Corporate Layoffs

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