Franchising is simply a way for a business to expand it’s outlets as well as distribute their products and services via a franchise agreement. The franchisor (a company or individual that gives permission to a third party the right to operate a business under the franchisor’s trademarks) specifies what products and/or services can be offered by the franchisee (a company or individual who is awarded the use of the Franchisors trademarks and trade name) in addition the Franchisor will also provide the Franchisee with a business model, training, brand and operational support in exchange for a fee (royalty). In some cases the Franchisor may also offer assistance in site selection, marketing strategies and business best practices.
Franchising provides entrepreneurs an affordable opportunity to be in business for themselves but not by themselves, by offering a unique business opportunity that is beneficial to both franchisee and franchisor. While franchising does offer a business opportunity, typically with far less risk, it is not a guarantee of success. A franchisee must apply their entrepreneurial spirit, skills, dedication and talent.
Franchising offers proven systems and support. Before making your decision, evaluate the support that the franchisor offers. Will the support offered assist you in achieving your personal and professional goals?
As an entrepreneur you will have to decide if the franchise system is for you. While franchising offers a great business opportunity, you are not absolutely independent. As a franchisee, the franchisor will determine what products are offered, the pricing of those products, when new products will be introduced, brand standards and in some cases geographic location. Additionally, in most cases, you will be responsible for an upfront franchise fee, as well as ongoing royalties and advertising fees.
Currently the franchising system provides over 8 million jobs, adds $890 billion to the economy and accounts for 3% of the GDP (Gross Domestic Product) in the U.S. Franchised businesses now account for more than one third of all U.S. retail sales.
For an entrepreneur to reach their full potential with a franchising business opportunity there are several keys to operating a successful franchise.
Your employees are your front line. Typically it is the employees that deal with customers on a daily basis.
Finding good help can be a daunting task. The more time and effort you put in on the front end to find good people will benefit you in the long run. Remember this is a long term business opportunity. Once you find good people you want to keep them
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There are keys to success, in retail franchising, that are true no matter the franchise you choose. Here are a few.
is probably one of the biggest variables that impacts earnings. Make sure you’re looking at a business that offers services and products that are in demand
also determines your earnings. It’s important to choose a franchise located in a community that will want what your business is offering. Remember, traffic drives sales and sales keep a franchise healthy and growing.
contributes to the success of a franchise. Treat your customers like family – and they’ll keep coming back.
are you ready to