Best Franchises to Own Under 10k
Many cheap franchise opportunities are now easily available to more and more people as one can choose to start up a business as a franchise with small capital by purchasing a franchise from an already established successful franchise business.
Many of them offer restaurant franchise opportunities and the rest that allow you to work from home. Do you want to know about franchise business so you can think of putting your money into one and escape this rat race everyone is talking about?
In this present recession, starting a franchise business and becoming your own boss is a sure way to escape the rat race and be financially free. If you are thinking to turn your existing business into a franchise business or you are a newbie that want to know everything about the franchise, then read on.
LIST: BUSINESSES UNDER 10K
My aim of writing this post is to explain in details everything you need to know about franchise business. I mean everything. Let’s get started…
What is a Franchise Business?
This is a form of trade in which the owner (franchisor) sells the right to their business products, services, and operation to a third party (franchisee). The independent operator (franchisee) trades with the business method, goodwill, and goods of the company. He/ she has to pay a royalty fee and a percentage of their total income to the company at an agreed period.
Applying for a Franchise?
For those considering applying for a franchise, there are some things you need to consider before you invest in a franchise. Buying a franchise can be a difficult process as there are many at there to buy but not all are as good as they make out to be.
Here are few things you need to consider;
Step 1: Know Your Budget
You need to first know how much you have budgeted to invest in any franchise. Have it in mind that the initial fee for any franchise is not the only cost. There are still other fees alongside the initial fee.
You have to consider if you are financially ready for the cost before jumping into any franchise business.
Step 2: Conduct Research
Another thing is, you need to know and understand the type of franchise you wish to invest in. You have to conduct thorough research about the franchise business before making your decision. The franchise business that you will want to invest in must be a franchise that you have interest in.
Some franchise companies are not as successful as they show in print. Ask to speak to the franchisor or any representative of the franchise. You can schedule a meeting and gather in-depth details about the business. Ask about the franchising fees, regulations, financial assistance if any and everything you need to know.
Step 3: Review the Requirements
After your investigation and queries, you should review every detail to make sure you are not missing anything. Starting a franchise is not what you should rush into.
Step 4: Fill the Application Form
Once you are convinced about their franchising terms, their mode of operation, training and other related matters, you may decide to fill in the franchise application form.
Step 5: Sign the FDD Agreement Form
When your application is approved by the franchisor, you will receive a disclosure document called FDD (Franchise Disclosure Document). The document contains the franchise agreement, litigations, and many more. You can move further to sign the agreement form and paying the required fees if everything stated in it is okay with you.
Franchise Business Ideas
Here are top franchise business ideas that have proven to be successful.
• Coffee Shop Franchise
• Retail and Supermarket franchises such as Carrefour,
Tips in Owing a Franchise
Step 1: Be Adaptable
A franchisor should be flexible and avoid being stubborn about sticking rigidly to its original business model. He or she has to follow market trends and not be rigid in his or her decision.
Step 2: Market Testing
It is advisable for a business to test the market before it begins franchising. This will make certain that there is a market for its products and services.
Step 3: Investment Capital
A prospective franchisor must be sure that he has enough funds before embarking on this kind of project.
Step 4: Develop and Maintain the Right Infrastructure
A franchisor must ensure that he or she has the right infrastructure in place to bring on new franchisees. This is very important.
Step 5: Choose the Right Franchisees
A franchisor must not make the mistake of bringing on board just about anyone who applies to be a franchise owner. The selection process should be rigorous enough to ensure that only the franchisees that have the right expertise and skills are brought on board.
Step 6: Nurture your Franchisees
A franchisor must never lose sight of the fact that it is the franchisees that are the lifeblood of a franchising business model. A franchisor must ensure that the franchisees are getting the support and guidance that they need to succeed, so that they continue to trust the franchise system and put in their best effort to become or remain successful.
Largest Franchise Chains in the World
Do you want to know the largest franchise chain in the world? Yes, there are top successful franchise chains that have since existence experience enormous growth that they are almost in every country of the world. You must have seen and even patronized their products or services.
Franchise Fees and Contract Agreement
There are some franchise fees and contract agreements that need to be understood if you are really interested in franchise business so you get caught unaware. I will try my best to explain the various fees involved in the franchise business.
Franchise Fee: This is the initial amount of money paid up front. It covers the right for the franchisee to use the franchisor brand. It only lasts for a fixed period of time agreed on the contract form.
Royalty Fee: This is another franchise fee that is paid to the franchisor. The franchisee takes a certain percentage (mostly between 2%-5%) of his income and sends it to the franchisor. The percentage is mostly outlined in the agreement form. Most times, the royalty fee do not cover marketing, advertising or support.
Advertising Fee: This is a separate fee, generally done on a quarterly basis, and it is used for promotion and ads for everyone under the umbrella of that particular franchise.
Aside from the fees, to seal the deal of becoming a franchisee, you will be given an FDD (Franchise Disclosure Document) within a week after submission of the application form. The reason is simple—to let you know about the investment details, obligations from both end (franchisor and franchisee), ongoing fees and other details.
It is also to make you aware of what you are about getting into. Sometimes, you will need an attorney at this stage to be sure you are making the right choice.
Just like any other business, there are risks present in buying a franchise business. Here are some risks associated with the franchise;
• Financing freefall
• Location liabilities
• Fake franchise
• An inactive franchisor.
• Over-demanding franchisor
Obligations of the Parties
Both the franchisor and the franchisee are to protect the business brand and trademark. Making sure the mode of operation is being followed and maintained. The franchisee is obligated to play his or her own part in making sure the rules and conduct are being obeyed. In other words, franchisees are not in full control of the business.
The franchisor must make sure needed equipment is purchased at a cheaper from sources directed by the franchisor or from the franchisor. A franchisor that wants the success of its franchisees should be able to provide financial support and training.
If a franchisor did not deliver according to what was agreed on, on the agreement form, it is regarded as franchise fraud. It is a very strong offense against the Federal Trade Commission.
To avoid entering into any fraud, here are some red flag questions you should ask yourself;
• Does the company have good experience in the niche of their offer?
• What is the financial condition of the company?
• Do they have a good history of success?
• Did the franchisor or representative talk to you about how much you will make so as to get you to buy the franchise?
• Were you promised training, assistance and did not see any value from it?
These are questions you must give attention to so as not to fall victim of franchise disputes and fraud.
How to Maximize Franchise Opportunities
As someone planning on buying a franchise, you need to consider your competence, proficiency in doing market research and acquiring proper advice from experts in the franchise sector.
To maximize your franchise opportunities as a consultant, you need to;
• Set realistic expectation.
• Choose the right franchise.
• Cultivate the necessary skills.
• Keep away from companies that over-populated or too thinly-occupied.
• Choose the right location
• Choose the right employees.
• Choose a growing industry.
Finally, I have covered all you need to know about the franchise business to make your decision to buy one. I believe you will make the right decision. Good luck!