08 Sep, 2017

Starting A Franchise

Starting a new franchise business is quite a challenging task which can also be very financially rewarding if it is done correctly. While starting a franchise, it is good to consider the benefits that franchising will bring to the business and any potential disadvantage that the business could suffer as a result of franchising. If you are a franchisor, you will control over the business since you will be giving other people a chance to run it as their own. On the other hand, a franchisee is not able to use his creativity or innovation to run the business since he has to follow the laid down procedures and processes that the franchisor has given. However, there are many potential benefits that a business owner can get if he decides to start a franchise. The major benefit of starting a franchise as a when you are a franchisor is that; you will get a chance to expand your business fast with out using any additional capital. As a franchisee, you will get a chance to own an already popular brand instead of starting your own from scratch which is a daunting task. Before you start a franchise you need to first check various laws and regulations that govern franchises in your particular industry including Federal and State laws. You can also get this information from a good attorney. If you want to be a franchisee you can get this information directly from the franchisor together with any other franchise information relating to patents, trademark and all other licenses required. When starting a franchise, you will need to prepare a franchise agreement where you will list all legal obligations that a franchisee will bear if he decides to buy into your franchise. The agreement must be in tandem with local laws. As a franchisor it is also important to prepare operating manuals and training materials before you put up franchises for sale. Before you get into starting a franchise it is important to determine the franchise fee. As a franchisor you should set a franchise amount that will compensate your efforts and the value of your brand. This fee should be sensible and attractive for prospective franchisees. If you are starting a franchise as a franchisee, you should find out the franchise fee that the owners of the franchise require as a prerequisite of getting into the business. Other management fees should also be commensurate with the support services that you are offering. Before starting a franchise, as a franchisor you should understand your duties and obligations that you owe various franchisees who have bought into your franchise. As a franchisor, you are required to provide training and guidance on the general direction of the franchise. If you are a prospective franchisee, you should know your responsibilities too as specified in the franchise agreement.