How to terminate a franchise agreement
Although a franchisor will give you the tools,...
Franchise is a good business model that lets you tap in the resources of a successful business. All you need is to meet the requirements of your franchisor and you're set to start a brand new franchise business. A franchise business also minimizes the risks of failure by letting you use the tested procedure of your franchisor. You need not worry about how to run the franchise business because the necessary training will be provided. Likewise, you will also be able to source the raw materials from a trusted supplier so you need not worry about the quality, price, and delivery options of your supplier because all these are already made available for your convenience.
While statistics suggest that the success of a franchise business is greater than that of an independent start up business, it is also important to note that this success cannot be easily duplicated without perseverance, dedication, and hard work. These characteristics are needed to succeed in this endeavor. The success of a franchise business would also be dependent on other factors like the location, the demographics in your area, and the living standard where your outlet is located. For example, if you are selling high end products then it is not going to sell in a low end market. But the franchisor would also give you assistance in determining which area their franchise would most likely be successful so the risk of establishing an outlet in a wrong location is minimized.
Franchise also gives you several benefits including being able to use the trade name, the logo, the marketing concept, and you will also benefit from the advertising that your franchisor does. Another advantage you will gain from availing of franchise opportunities is that the products or service you will sell already has public recognition and acceptance. In addition, your franchisor will provide for the necessary training that you need to run the franchise business.
The franchise cost of availing of a franchise opportunity would vary greatly on how popular the establishment is. The kind of product or service that you are interested in franchising would likewise be a factor on what the franchise fee is going to be. Most franchisors also require that you pay a royalty fee to them for every product that you sell. The royalty fee can range from two percent to ten percent, sometimes even greater depending upon what you agreed upon. But depending on the kind of establishment you are interesting in franchising, the royalty fee is overall a small price to pay to have the right to run a successful and popular business establishment.
Most franchise business also has a successful formula that enables them to compete in the market. And being a franchisee of these establishments will give you the edge over the competitors in your area that provides a similar product. It is no wonder then that franchising is a widely popular business model that is adapted from a variety of business establishments all over the world.