Are you 10 years away from retirement looking to build something? Franchises are often an excellent solution for people looking to set up their own business and be their own boss. Franchise consulting firms, such as the International Franchise Professionals Group (IFPG), help aspiring business owners identify and invest in the right franchise businesses. In this article, we answer some of the most frequently asked questions about franchises.
What Is a Franchise?
A franchise is an arrangement between a franchisor (the company that offers a franchise opportunity) and a franchisee (the person who invests in the franchise opportunity). Under a franchise agreement, the franchisor grants a license to the franchisee to operate a business using their brand, systems, and processes. The franchisee typically pays the franchisor a royalty fee and other expenses relating to the franchise.
How Can I Invest in a Franchise?
Investing in a franchise requires research, legwork, and plenty of dedication. Start by exploring your options in the market and talking to existing franchisees about what worked for them and what didn’t. You should also identify potential franchisors and research their business in detail. You’ll also need to understand all the legal intricacies and make sure the franchise is financially viable for you.
Before signing on the dotted line, it is important to be informed of your rights as a franchisee. You should make a list of things to consider, such as cost, the term of agreement, the territory covered, marketing fees, continued support, and your own plans for running the business.
What Is a Franchise Broker?
A franchise broker specializes in helping aspiring business owners identify and invest in the right franchise opportunities. The role of a franchise broker is to match franchisees with the right franchisors based on their financial position and personal preferences. The broker will also assist an aspiring business owner with the paperwork involved in setting up the business, the complexities of the legal framework, and other operations-related tasks.
What Is the Difference Between a Franchise and a Business Opportunity?
A franchise is an agreement between a franchisor and a franchisee, while a business opportunity is an offer for a “turn-key” business that the seller will set up, equip, and/or provide you with initial operating funds for. Franchises involve ongoing payments, such as franchise fees, royalties, and other expenses, as well as ongoing support from the franchisor. Business opportunities, on the other hand, offer no ongoing support.
What Jobs Can I Do in Franchising?
Franchising offers a wide range of jobs and opportunities for people looking to break into the industry. Franchise consultants often help aspiring business owners identify and invest in the right franchises. Franchise brokers act as go-betweens, matching the right franchisee to the right franchisors. Other opportunities include franchise sales positions, franchise development managers, marketing and advertising professionals, customer service and IT support professionals, and legal specialists.
What Training Do I Need to Become a Franchise Professional?
The International Franchise Professionals Group (IFPG) offers a wide range of training programs for aspiring franchise professionals. You can take courses on topics such as franchise sales and success, legal compliance, and industry best practices. You can also opt to become a certified franchise consultant, franchise broker, or franchise vendor—all of which require knowledge and experience in the franchising industry.
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