Real Estate Information

Article Navigation

Click Here for more articles

Home Based Franchising

by: Shawn Price

Copyright twozerozerofive Shawn Price

Is Home Based Franchising for you?

Do you desire Home Business Ownership but cringe atthought of starting from scratch?

PossiblyHome based Franchise is your answer.

A Franchise isbusiness in which "... franchisor,owner and developer offranchise system licenses [you] franchisees to use trademarks, service marks, logos, or advertising owned or developed byfranchisor." (International Franchising Association, Franchising basics).

With some franchise programs,business operates usingFranchisor's brand name only.

Other programs are less restrictive and allow forusage of bothtrade name in addition tofranchisor's brand name.

Common to all franchise programs,franchisee[ you] is responsible to payfranchisor, advertising fees, initial fees, service fees, and or royalty fees.

You are responsible for payment whether your business is profitable or not.

Additionally, many franchisor's provide educational programs to franchisees beforeinception ofbusiness.

Often times, they've done demographic studies and other studies to ensure that you have greater odds of returningprofit.

Major Franchise Types

• Unit Franchising

Ismost simple type of franchise in whichFranchisor grantsfranchiseeright to operatesingle operation atspecified location or withinparticular territory.

• Area Development Franchising

In accordance with"development schedule",franchisee agrees to establishpredetermined number of "unit franchises" withinparticular territory.

• Subfranchising/Master franchizing

Is quite similar to Area Development Franchising withmajor difference being thatfranchisor grantssubfranchisoroption of openingunit franchises herself or sellingthe franchises to third parties. (Common with International franchising)

• Affiliate Franchising

This type of set up is typically used byowner ofestablished business who decides to join/affiliate withfranchised chain.

This allows forbenefit offranchises brand. This is common with many real estate.

• NonTraditional

This type of set up is customized betweenfranchisor andfranchisee.

Franchises are notsame as Dealerships and distributorships

A dealership or distributorship differs fromfranchise in that there is no FEE involved. Dealers purchase products usually frommanufacturer at wholesale prices.

Note however, thatdealership can becomeFranchise IFFEE is paid tofranchisor ANDdistributor is dependent uponfranchisor's pay structure.

Considerations when buyingfranchise

• There'sbenefit to purchasingfranchise that is well known

• Willfranchisor provide ongoing education and support?

• Were demographic studies performed?

• How many offranchises have closed operation? Why?

• Have you STUDIEDfranchiser's Comprehensive Disclosure Statement? It's required by Law that prospective Franchisee's are provided Comprehensive Disclosure,copy offranchisor's Standard Franchise Agreement, Audited statements,list ofnames of all ofFranchisees, as well ascopy of all documents that requirefranchisees' signing.

By law, each ofabove must be provided at least two weeks prior to purchase date.

• I've heardsaying, "if you buyMcDonald's, be prepared to eat burger's for breakfast lunch and dinner." In other words, your business requires commitment.

Additional Sources of information

•Success Magazine

•International Franchise Association www.franchise.org

•Franchise Sales Press *Get this magazine since it is known for its focus on franchise opportunities. Further, they perform regular interviews with both franchisees as well as with franchisors.

•SBA Small Business Association

•Brokerage firms and analysts Since stock information on A public company is useful.

•Franchise Lawyer •Federal Trade Commission Public Reference Branch

•UFOC "Uniform Franchise Offering circular --material that is provided by law, byfranchisor toqualified franchisee. This is likelymost telling of all information gathered.

•Attorney General's Office

•BBB located incity ofFranchisor's headquarters.

•Your Banker should have access toDunn and Bradstreet Report onparticular Franchisor.

•Contactfranchisor's franchisee's listed in UFOC. *** Preparelist of relevant questions prior to calling.

Purchasing franchise usually equates toreduction in investment risks since the" system" and Franchise name is established, training and ongoing support is provided, market research has been conducted... Conversely…

franchise ownership can be costly. Consequently, it is critical that you investigatefranchise thoroughly prior to purchasing.

There iscontinual rise innumber of franchises. Obviously, there'sHUGE market for this method of business ownership. When approached methodically and practically, Franchise ownership can be Very lucrative and much simpler than beginningbusiness fromground up.

Be wise and ensure that you conduct sufficient research prior to committment.

If you’ll need financial backing, then you will need to createbusiness plan. There’shandy Business Plan workbook available at our site.

BridgingGap between Opportunity and Success, OwnABizToday.com

Aboutauthor:
Due to her terminally ill, physically and mentally handicapped child, Shawn was FORCED out of"job market" and FORCED into "self employment" ...After experiencingmultitude of financial difficulties. Because of her life's experiences, Shawn understands that it's impossible to predict future circumstances and thus it's terribly important that people...particularly parents, develop financial security. Consequently, leading others toward business ownership has becomepassion for Shawn. Presently, Shawn isAuthor of OwnABizToday's, Ezine, which presents New Home business Start up's and Small Business Resources each week. To receive our weekly Ezine, sendblank email to: subscribe@ownabiztoday.com RSS: http://www.ownabiztoday.com/ownabiztoday.xml BridgingGAP between Opportunity and Success, OwnABizToday (http://www.ownabiztoday.com )

Circulated by Article Emporium