| To many people the idea of franchising their business | | | | shown. |
| entity seems like a wonderful way to expand, | | | | By the same token, it is vital that the franchisees not |
| however getting started on the road to establishing a | | | | feel that you are overcharging them for services or |
| successful franchise opportunity can be difficult. There | | | | that the services for which they are paying are not |
| are several key disadvantages to franchising your | | | | what was represented to them, otherwise they may |
| business that should be considered so that you are | | | | become unhappy and join together to withhold |
| better prepared to make the right business decision: | | | | payment of franchise fees. Take care to look at each |
| Weakened Net Earnings | | | | franchisee as a smart, cost-effective substitute for a |
| Only a few franchises break even immediately, in fact | | | | company manager, especially when assisting and |
| most franchises take six months to one year to move | | | | supporting that franchisee. |
| to the black. If you are relatively sure that | | | | Difference in Required Business Skills |
| company-owned outlets can produce immediate profit | | | | The business skills you will need for operating a |
| and you have the capital and manpower to staff them, | | | | business franchise system are completely different |
| you will certainly make much more money with | | | | from those required to run your original retail business. |
| company-owned outlets than if you were to franchise | | | | Most business people who fail in franchising are those |
| an equal amount of businesses that made the same | | | | who had no business sense for what they were doing |
| amount of profit. Your main challenge will be to obtain | | | | in their original company-run business. Nobody is |
| the necessary start-up capital and find and hold onto | | | | assured of becoming a top-notch franchisor simply |
| qualified management and hard-working employees | | | | because they had an incredible business idea and a |
| while hoping that sales will immediately surpass the | | | | brilliant business plan. |
| substantial costs associated with starting up | | | | Overspending |
| company-owned retail outlets. | | | | Franchisors tend to get caught up easily in the glamour |
| Franchisee Freedom | | | | of high-rise office buildings, overstaffing, company cars, |
| Many franchisors seem to forget that their main focus | | | | lavish hotels, elaborate trade show booths, and |
| and get caught up in the process of selling franchises. | | | | expensive advertising campaigns while generally |
| The number one goal of any franchisor is to sell his | | | | undercapitalizing and not budgeting soundly. It doesn't |
| service or product and the employment of franchisees | | | | matter if your capital is $20,000, $100,000 or higher - |
| is how this goal is achieved. The key is to treat all | | | | carefully budgeting the cost of your office, the |
| franchisees fairly and with just enough control to | | | | marketing of your franchises, the training of your |
| ensure that your service or product is marketed to | | | | franchises, and the maintenance and support of your |
| consumers with the same quality that made the parent | | | | franchise outlets is vital for market stability and |
| business a success. It is imperative to find the right | | | | continued success. |
| people who are dedicated to following what they are | | | | |