Multi-Unit Franchise Experts

Franchises for Those Affected by Corporate Layoffs

Investing in franchising could be a viable opportunity for those that are affected by corporate lay-offs and facing limited career choices in today’s job market. Aspiring business owners have the unique opportunity to invest in a potentially lucrative venture with the security that comes with a proven business model and knowledge of established business processes. At the same time, franchising is not the right fit for everyone, so it is important for investors to be familiar with the potential risks and rewards associated with franchising before making an investment. This article aims to answer some of the most common questions faced by those considering franchising after a layoff.

What Is Franchising?

In franchising, a franchisor, such as a restaurant chain or retail business, allows an individual or group of individuals to use its trademark and business model for the purpose of operating an independently owned and managed business. The franchisor provides the franchisee with its business concept, technical expertise, such as product design and process engineering, as well as brand-related support, such as marketing, advertising, financial, and operational training. In exchange for access to the franchisor’s proprietary knowledge, the franchisee pays a start-up fee, a negotiated amount known as a royalty, typically based on a percentage of company sales, and sometimes an advertising fee.

What Are the Benefits of Franchising?

The biggest benefit of franchising is that it can provide aspiring business owners with the opportunity to achieve financial freedom, something that can be frustratingly out of reach when it comes to working in the corporate world. Investing in a franchise can also provide investors with the peace of mind that comes from investing in a proven business model and leveraging the power of a national brand. Another significant benefit of franchising is that it allows investors to take advantage of the franchisor’s training programs and resources, reducing the cost and time of the learning curve when it comes to setting up and running a business.

What Are the Risks of Franchising?

No investment is without its risks and franchising is no different. While franchisors take the time to outline their expectations and practices to franchisees, expectations are rarely met and contract disputes are not unusual. Franchisees should also be aware of the fact that they are ultimately responsible for the success or failure of their business due to their location, pricing strategy, promotions, and other external factors, some of which may be out of their control. Furthermore, even the most successful franchised businesses may still experience losses due to factors such as fluctuating local and national economies.

What Are the Best Practices for Investing in a Franchise?

For those considering investing in a franchise, it is important to choose a company that aligns with your interests and skills. To help make the right decision, it is a good idea to speak to current franchisees in order to get a better understanding of a potential franchise’s performance and reputation. Once a franchise opportunity has been identified, it is critical to read and understand the franchise contract in its entirety, as well as to undertake due diligence on the potential franchise’s finances, operations, and market.

Topics:

Franchising,

Corporate Layoffs,

Investment Opportunity

Download your free copy!

Explore multi unit franchising opportunities and uncover the mysteries of franchising in this e-book.

And learn to evaluate franchise concepts like an insider.

Request a Franchise Evaluation