A franchise is the formal right, or license, granted by a company to an individual, group or corporation to market its products or services. Usually franchises are limited to specific geographic territories to protect previously existing franchisees.

Advantages of buying a Franchise

There are very important advantages in starting your own business by buying into a franchise. The primary advantages are:

> The product (or service) is established and may be well advertised
> Potential customers will be coming to a known entity
> Assistance in creating and placing advertising is frequently available
> Experienced assistance in setting up your business is usually available
> Training of your employees and you is usually available
> The Federal Trade Commission (FTC) and many states have laws and regulations that can protect you to a great degree in getting involved in a franchise

Disadvantages of buying a Franchise

These are just some of the possible disadvantages of buying a franchise. Your attorney can be more complete and specific when he/she knows the identity of the franchisor:

> Getting involved in a franchise requires experienced professional assistance and, probably, a lot of research.
> Most franchise agreements are negotiable but negotiations usually start heavily in favor of the franchisor.
> Franchises can be very restrictive, e.g., where you but your supplies, the appearance of your facility, even to how your employees dress.
> Franchises are not necessarily transferable to a new owner which can make your business hard to sell.
> If the franchisor is a one-person company and that person become incapacitated, your franchise could also become history.

In making your decision you especially need to evaluate the available territory as well as the compatibility of the franchised product (or service) with your own individual likes and dislikes. It is far easier to be successful in your own business if you enjoy what you are doing. Otherwise it becomes just a job that you come to regret.

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Further Reading
Commission Express
Rare Info For Franchise Purchaser
Offer Perks For Your Customers at Your Franchise
Exiting your franchise
Dealing With High Pressure Franchise Sales Tactics

This entry was posted on Wednesday, December 3rd, 2008 at 5:52 pm and is filed under Franchise Articles. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.