Dreaming of owning your own business? Franchising may not be exactly what you are dreaming of, but the benefits of franchising just may change your mind. Owning a business that is already established, is a great head start. The risks are far lower than starting from scratch. You will have the guidance of a team already in place from site selection to grand opening. Creating a franchise is when a company sells its rights to its existing business model and products to another person or company.
Regulations With Franchising
There are federal regulations in place to protect the rights of the franchisee and franchiser. The FTC helps to oversee and enforce franchise laws to ensure that entrepreneurs receive full disclosure on the state of the business they are joining, and that the franchiser’s brand is protected. Franchisers are required to provide a franchisee an FDD, or franchise disclosure document. This outlines the fees, investments, and bankruptcy and litigation history of the franchiser company. There are also registration and relationship laws that govern the registration of the franchise, salespeople, and advertising, as well as grounds for terminating a franchise, note and cure periods, grounds for non-renewal, and equal treatment. These vary from state to state.
Things To Consider
While it does offer many benefits to its entrepreneurs, franchising requires a notable investment. Once the initial fee is paid, the franchisee can start setting up the business and sell the products under the franchise’s brand name. Part of putting the plan into motion requires the franchisee to propose a location for the store, business model, business opportunities and royalties. If all the terms of the franchise contract are agreed upon, the entrepreneur can go ahead and set up the storefront. This will all require an additional investment of time and money. Franchising, while very appealing to most entrepreneurs, can limit your ability to move and grow in different directions. Finding a business with a sustainable business model and successful track record is essential. Do your research before joining as a franchisee.
What Are The Benefits?
The most significant benefit is being able to ride the shirt tails of the entire organization, their expertise, and experience. You can omit many of the downfalls in building a company from scratch by joining an accomplished brand. Some of the many advantages of franchising include perks of the brand, business with a proven success record, low risk for banks, and easier access to loans.
Opportunities To Look For
There are many industries that have successful business practices being sold as franchises. Here are some franchise opportunities that are prospering: daycare services, hair salons, fitness gyms, sip and paint studios, pizzerias, frozen yogurt, property management, adult/senior daycare, spa and beauty services, and vending machines.
Contact Aaron (608-576-4592) for a Free Consultation!
About Aaron Bakken
Franchise Consultant for The Franchise Consulting Company
Aaron has 20+ years of franchise and independent business ownership experience. He also spent 5 years as the VP of Franchise Development for an international franchise group, growing the franchise to the advent of a private equity buyout. Whether you are looking to buy a franchise opportunity or franchise your business, Aaron knows how to guide you.
No Cost To You
Aaron is paid by franchisors and development companies for bringing them viable franchise investors. So frankly, his clients have nothing to lose by engaging with him but a bit of their time. Aaron helps his clients navigate the complex world of franchise ownership and development and provides long term guidance to help his clients achieve their entrepreneurship goals.