Buying A FranchiseBuying A Franchise

Buying a franchise is not for everyone. This guide will help you evaluate whether buying a franchise is right for you. It will help you understand your obligations as a franchise owner. Many people dream of owning and running their own business but are often let down by the reality of doing so.

By purchasing a franchise, you often can sell goods and services that have instant name recognition and can obtain training and ongoing support to help you succeed. But be cautious. Like any investment, purchasing a franchise is not a guarantee of success.

A franchise typically enables you, the investor or "franchisee," to operate a business. By paying a franchise fee, which may cost several thousand pounds, you are given a format or system developed by the company ("franchisor"), the right to use the franchisor's name for a limited time, and assistance.

While buying a franchise may reduce your investment risk by enabling you to associate with an established company, it can be costly. You also may be required to relinquish significant control over your business, while taking on contractual obligations with the franchisor.

Outlined below are some of the main points you need to consider before buying a franchise:

Franchise fee: Your initial franchise fee, which may be non-refundable, may cost several thousand to several hundred thousand pounds.

Royalty payments: You may have to pay the franchisor royalties based on a percentage of your weekly or monthly gross income. You often must pay royalties even if your outlet has not earned significant income during that time. In addition, royalties usually are paid for the right to use the franchisor's name.

Advertising fees: You may have to pay into an advertising fund. Some portion of the advertising fees may go for national advertising or to attract new franchise owners, but not necessarily to target your particular outlet.

Controls: To ensure uniformity, franchisors typically control how franchisees conduct business. These controls may significantly restrict your ability to exercise your own business judgment.

Terminations and Renewal: You can lose the right to your franchise if you breach the franchise contract. In addition, the franchise contract is for a limited time; there is no guarantee that you will be able to renew it. A franchisor can end your franchise agreement if, for example, you fail to pay royalties or abide by performance standards and sales restrictions. If your franchise is terminated, you may lose your investment. Franchise agreements typically run for 15 to 20 years. After that time, the franchisor may decline to renew your contract.

Before investing in a particular franchise system, carefully consider how much money you have to invest, your abilities, and your goals.

You may freely reprint this article provided the author's biography remains intact:

by John Mussi
References and Bibliography

John Mussi is the founder of Direct Online Loans who help UK homeowners find the best available loans via the http://www.directonlineloans.co.uk website.

Rated:NR/0 Votes
5 Views
Add To My Article Reading List
Add To My Article Reading List
Print Article
Print
More Article By John Mussi
More Article by John Mussi
Share
More Articles From Small Business
More Articles From Small Business
Related Articles and Readings
Franchise Opportunity Tips Part 2 By: Jeff Lubthisophon
1. Question the franchisor: The decisions that you make about your potential business will need to be based upon information from very pointed questions to the franchisors. Questions such as, what is the initial franchising fee. These fees vary from franchise to franchise and could run as high as several hundred ...
How to Franchise: Tips on Growing Smart and Risking Less By: Jamshaid Hashmi
Become a part of the network of men and women who have taken their entrepreneurial spirit, managerial skills and business development capabilities to a place of security, professional freedom and personal success. ...
Finding a Franchise to Buy - Where Should You Begin to Look? By: Michelle L Kirkbride
Have you finally made the decision to expand your current business and purchase a franchise? If so, congratulations are in order for taking the first important step. ...
Buying Your First Franchise By: John Morris
A lot of aspiring entrepreneurs have saved enough money and are still in search of some guidance when it comes to entering the small business arena. Always be on the lookout for buying a franchise opportunity that is not seasonal but can still rake in the cash for you.1. Budget ...
A Franchise Secret Guaranteed To Make Crooked Franchise Sellers Break Out Into A Cold Sweat By: Art Hamel
Back when I first started buying businesses 50 years ago, I actually started out with franchises. And over the years I've seen a lot of crooked franchise sellers and parent companies. Some of them, it would seem, are in business for the sole purpose of screwing you over. ...
The information provided in this article and/or the comments is the sole responsibility of their respective authors and does not necessarily reflect the opinion of ezinepost.com. ezinepost.com  does not endorse any article and/or comments published by our web users unless otherwise noted. 

Member Panel

login to submit articles and more

StatisticsEZINEPOST.COM

  • » Active Categories: 419
  • » Active Articles:252603
  • » Active Authors:31917
  • » Active Members: 38237
  • » Statistics Updated:
    - Tue Sep 1st, 2020 09:28AM EST