Are you tired of your corporate career, feeling unfulfilled and wanting to transition into business ownership? Then you may want to look at investing in a franchise. With the proper guidance from the International Franchise Professionals Group (IFPG), you can be well on your way to owning a profitable business. Our specialized franchise brokers are here to guide aspiring business owners and investors through the process of identifying and investing in the right franchise business.
There are countless questions to be answered and considerations to be made when looking into franchising. To help navigate through the process, here are some commonly asked questions about business franchises:
What is a Franchise?
A franchise is a business model where the franchisor provides the franchisee with license to use the company’s trademarks, business systems, and products or services. The expectations and obligations of both the franchisor and the franchisee are established in a franchise agreement. The franchisor, who is typically the business owning the brand, provides the franchisee with the training needed for business operations, and access to the brand’s marketing and other services. The franchisee benefits from the brand’s reputation and already existing customer base, and pays the franchisor a fee in return for this privilege.
What are the Advantages of Franchising?
Franchising offers several benefits:
- It’s an established system, meaning that success is far more likely than it is with a start-up business.
- It’s easier to secure financing when investing in an established franchise.
- The franchise already has an existing customer base.
- It’s a relatively hands-off system, such that there’s greater flexibility and less risk involved than with independent businesses.
- Teams responsible for training and marketing offer reliable resources and assistance.
What Fees are Associated with Franchising?
The fees associated with owning a franchise vary, but typically include:
- Initial Investment Fee (covers the cost of signing the franchise agreement)
- Royalties (payments from the franchisee to the franchisor typically based on gross sales)
- Advertising Fees (fees, typically a percentage of total sales, which the franchisee must pay for the franchisor’s advertising)
- Site Selection and Lease Negotiation Fees (cost associated with renting a location)
How Do I Find the Right Franchise Opportunity?
Finding the right franchise opportunity can be a daunting task. However, armed with the right information and guidance, such as that available from the IFPG, you can find the right franchise business to suit your skills and financial goals.
It’s important to do extensive research into the potential franchise opportunities you’re interested in to make sure you understand the expectations, fees, and other obligations required of the franchisee. Also, take the time to talk to people who have experience with the franchise, such as current franchise owners and franchise brokers. Consulting experts for guidance can be invaluable during the research and investment process.
How Do I Launch a Franchise?
Launching a franchise involves more than just writing a check; it involves making sure you’re the right fit for the franchise, and that the franchise is the right fit for you.
Start by assessing your interests and skills. What kind of business do you want to own? What would you enjoy doing? What kind of customer service do you want to provide? What qualms do you have with the practical aspects of running a business? You’ll want to make sure your franchise of choice provides the necessary resources and support needed to ensure success.
Next, research the franchise you’re interested in. Make sure to read all of the documentation as the franchise agreement can be full of legal terminology and you’ll want to be sure you understand all aspects of the agreement.
Lastly, it’s important to develop a financial plan and assess the finances necessary to invest in the franchise. Consider the initial cost, as well as the expected ROI.
Are Franchises Easy to Finance?
Yes, many potential franchisees find that financing a franchise is much easier than financing a start-up business. That being said, many franchisors have minimum liquidity requirements that expect potential franchisees to have a certain amount of liquid assets available.
A qualified franchise broker can help to guide you through the financing process and assist you in connecting with the necessary resources available.
What Industries Are Available?
Franchises are available in a wide range of industries, including food and hospitality, retail, automotive, beauty, education, and more. The best way to find the right franchise opportunity for you is to do extensive research into the different industries and franchising opportunities that exist.
Topics:
