As Wikipedia.org states it: “Franchising is a method of doing business wherein a franchisor licenses trademarks and tried and proven methods of doing business to a franchisee in exchange for a recurring payment, and usually a percentage piece of gross sales or gross profits as well as the annual fees.” franchising is a big business in the US. It’s not only the likes of McDonald’s, Burger King, Dominoes, and other big players that are offering franchise opportunities. There are many small and medium companies offering franchising models too. Product distribution franchisee simply sells the product manufactured by the franchisor for example Pepsi, Ford, etc.; while a business format franchisee uses a franchisor’s product, service and trademark, along with the complete method to conduct the business itself, such as the marketing plan and operations. Examples of such a model are fast food chains, retail outlets, convenience stores, educational institutions, etc. (more…)

It may take some labor to find the right franchise so don’t throw in the towel. There are a number of sources for the information you will need before selecting the right franchise. It may take some effort to find the right franchise so, don’t compromise.

There are a number of sources for the information you will need before selecting the right franchise. Some web sites allow you to read more detailed information on a brand and give you an idea of price and royalty structure, etc… (more…)

Over the past several decades, franchising has become not only a uniquely American institution, but also one of the leading doorways into small business ownership in America. Every year, thousands of individuals choose to get into business ownership via the franchise route.

But is going the franchise route really a better choice than starting your own business? That’s something you’ll need to answer for yourself. But it is worth the time and effort to find out. Making the right choice for your own situation, as well as determining which franchise to buy, requires careful research. It’s a big investment on your part, and you must investigate before you put up the money.

According to the International Finance Association (IFA), franchised businesses are growing at a rapid pace. Some 400,000 franchised businesses now employ nearly 10 million people with a payroll of $230 billion. There’s always a hot new franchise on the scene, Curves, for example, a network of franchised women-only fitness centers, grew nearly 38 percent in a single recent year. (more…)

The US alone has about 6500 different franchise systems. The franchise industry is vast and can be really confusing when considering buying a franchise. You may ask yourself many questions such as: is the company a franchise? Is it available in my area? Can I qualify? While a franchise consultant won’t have a total knowledge of all franchise opportunities available, he will be able to give you a lot of information about franchising in general and about the franchises he represents.

Franchise consultants get a commission from the franchisor when they sell a franchise. Some franchisors offer bigger commissions than others, so it is really tempting for the franchise consultant to “guide” potential franchise buyers in the direction that pays him the most…

A franchise consultant should:

- Never charge you for their services
- Inform, educate and give an unbiased insight on the franchising industries and its various opportunities
- Define your qualifications and make sure that you would be the right fit for the franchise you are interested in
- Present your application to a franchise

- How much capital do I have to invest?
- What is the value of my liquid assets?
- Do I require a specific level of annual income?
- Am I interested in pursuing a particular field?
- Am I interested in retail sales or performing a service?
- Do I want a part-time or fulltime opportunity?
- How many hours am I willing to work?
- Do I want to operate the business yourself or hire a manager?
- Do I want to have employees?
- Do I want to have inventories?
- Do I want to have Accounts Receivables?
- Will franchise ownership be my primary source of income or will it supplement my current income?
- Would I be happy operating the business for the next 10 years?
- Would I like to own several outlets or only one?

Fifteen states have franchise investment laws that require franchisors to provide pre-sale disclosures, known as “offering circulars,” to potential purchasers. Thirteen of these state laws treat the sale of a franchise like the sale of a security. They typically prohibit the offer or sale of a franchise within their state until a franchise offering circular has been filed on the public record with, and registered by, a designated state agency. Two of the fifteen states do not require a filing of offering circulars, as noted in the list of state offices below.

These state laws give franchise purchasers important legal rights, including the right to bring private lawsuits for violation of the state disclosure requirements. We encourage potential franchise purchasers who reside in these states to contact their state franchise law administrators for additional information about the protection these laws provide.

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Introduction

Many people dream of being an entrepreneur. 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.

The Benefits and Responsibilities of Franchise Ownership

To help you evaluate whether owning a franchise is right for you, the Federal Trade Commission has prepared this booklet. It will help you understand your obligations as a franchise owner, how to shop for franchise opportunities, and how to ask the right questions before you invest.

A franchise typically enables you, the investor or “franchisee,” to operate a business. By paying a franchise fee, which may cost several thousand dollars, 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. For example, the franchisor may help you find a location for your outlet; provide initial training and an operating manual; and advise you on management, marketing, or personnel. Some franchisors offer ongoing support such as monthly newsletters, a toll free 800 telephone number for technical assistance, and periodic workshops or seminars.

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.

Below is an outline of several components of a typical franchise system. Consider each carefully.

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Deciding to buy a Franchise is a huge decision. Once you have convinced yourself that franchising suits your character and business aspirations, have identified the right franchise, done your sums, attended the initial training and perhaps paid an initial deposit you will be presented with a Franchise Agreement to sign.

Typically this agreement could run to 40 or 50 pages and can be a daunting read to those unfamiliar with commercial contracts. The very nature of a franchise business structure means that the agreement will be fairly complex. Remember that this document provides the framework for your business life over the next seven years or so.

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