Business Styles: Franchising
Since it is day two of my week talking about business types, today I will be sharing some information on owning a franchise, what exactly a franchise is, and etc. I also hope to share some links to resources that I find to be helpful for those interested in learning more.
So, what exactly is a franchise?
Every definition I’ve read says basically the same thing, even though they’re phrased differently. A franchise is when a franchisor grants a potential franchisee the right to sell the products or services that the business sells. Their are fees involved. Although the agreement details are all different for each franchise, basically a franchisee will pay a fee for the franchise. The fee, of course depends on the franchise and the contract.
If you’re currently looking into purchasing a franchise, I have a few tips that you should consider before you get started.
- Dig for information. Before you go into anything, you should investigate it. That definitely goes for a franchise. The more information you have about it before you get into it, the better. That way you won’t find as many surprises once you get started.
- Read the contract before you sign it. This is very important when it comes to anything you’re about to sign. You need to know what you’re signing and understand everything in it before you commit yourself to it. Ask a lawyer to look at it as well, if that helps. Just make sure you know every little clause and every little “fine line” in it first.
- Would you buy that product or service that you intend to sell? If the product or service you intend to sell through your franchise is something that you wouldn’t even want to buy yourself, then why should anyone else want to? It’s hard to stick behind something that you don’t even like. So if you’re going to invest in a franchise, make sure it’s something that you enjoy.
- Make sure there’s a need for your franchise type. If you’re wanting to open a McDonalds, but there are already 3 McDonalds in that area, it might be good to consider something else. An area that’s saturated by one product already isn’t going to find much reason to buy from you. Instead start a franchise that will help fill a void or need in that area. You’re more likely to be successful.
This is not all the advice you’ll need before you start something as big as this. So I’d definitely encourage you to ask around and get all the information you can. The resources below are a good place to start, I think.
Resources
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