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Exploring The Franchise Option
By Ford R. Myers
In today’s challenging economy, many people feel that they have lost a sense of control over their careers. Widespread corporate layoffs and downsizings have made the job market a tenuous environment Read more...
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Fastfit International Inc. Is Pleased To Announce The Sale Of Its First Canadian Franchise
June 7, 2005 -- Fastfit International Inc. has sold its first Fastfit 30 Minute Fitness For Men franchise to Cassgarr Sports Inc., a Canadian management company. The first location will open July Read more...
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Free Advice During Uk National Franchise Week
The UK National Franchise Week started on Monday October 4. Franchise Development Services (FDS), an ISO 9002 quality assured consultancy group, will be supporting the event by offering free advice Read more...
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Franchise Entrepreneurs - Buying Yourself A Job?
By Marius Tesselaar
A Opportunity - What Is This Exactly?
The best way to describe a is to imagine it as a business that is delivered to you in a box at a certain cost and after approval. When you open the box, you will find marketing materials, contract templates, business plan templates. In short, everything you need to get legally started with a business, usually in an exclusive territory where only you can operate and sell.
Why Are Franchises Popular?
Franchises are popular. Research was conducted by the International Federation Association and the National Association recently. In 2005, there were about 850.000 franchises operating in the U.S. alone in which around 10 million people are employed. Sales volume accounts for about 40% of all retail sales with around $1.5 billion.
At this point, I do not really know if there is any business left that has not been using the model already. You can find restaurant franchises, cleaning services and even dental practices. Most popular categories still seem to be the restaurant, deli and sandwich franchises.
Franchises all have a couple of things in common that makes them attractive to potential business owners:
1. Fast start up utilizing a working marketing system;
2. Peace of mind because it has been proven to work already;
3. Exclusive territory (in most cases).
There are known disadvantages as well. For example, a lot of companies do not give the level of support they promise. Some of them can be overly strict with their branding and marketing requirements, which may be disappointing for a creative entrepreneur. And there is obviously the work pressure, especially when operating a that requires staff as well.
Cost and Benefit Analysis - Quick Overview
Costs
The convenience and peace of mind comes at a certain price. Let's look at some typical startup fees.
The average investment level is around $250,000 excluding real estate. This is the average investment requirement for about 80% of the franchises.
A typical example is Rising Roll sandwiches who requests a total capital investment of $300,000 and a net worth requirement of $500,000.
So called low cost franchises can start with a capital investment typically in the range from $15,000 - $40,000.
A typical example is a video business card distributorship that comes at a cost of around $15,000.
Benefits
No exact figures are known but I found the following indications based upon figures researched by the International Association. They found that the annual gross income for a typical ranges between $75,000 - $125,000 (before taxes).
With an investment level of let's say $250,000 you can expect a pay back time of around 3 years.
It is clear that becoming a franchisee requires cash to sustain yourself and the business in the first years. It also requires some sustained hard work to get the business off the ground so to speak.
Franchise Entrepreneurs - Are You Capable
An survey among Franchisors (by 500 and published in Entrepreneur Magazine Jan 2007) has revealed they are looking for the following characteristics in a person to be considered to become a successful franchisee.
1 - People Skills
94% of the franchisors that were interviewed mentioned this to be a key skill. Not really
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