If you have a question regarding something to do in a franchise, it is likely we have heard of it before. Below we cover some of the more frequently asked questions:
Question: What exactly is franchising?
Answer: Franchising is when you buy into a certain company. This allows you to use the rights and the business concept that goes with that particular brand. All you have to do in return is pay the initial franchise fee and a low percentage of your monthly profits.
Question: What defines a franchise?
Answer: A franchise is an agreement with the parent company and yourself. When you sign into a contract you are allowed to use any and all of the logos, markets all the products within that franchise and use all the business plans to succeed in operating the franchise. There will a legal agreement binding both parties together with only a small initial fee of buying into the business and what is called a royalty fee through the profits.
Question: Is it true that it is better to buy into a franchise rather than start my own business?
Answer: It has been proven time and again that buying into a franchise is the best route to go. This is due to a variety of reasons. You would be buying into a company that already has a national reputation. Through premade policies that are guaranteed to make the business succeed you don’t have to go through a trial and error period.
Question: How much does it cost to buy a franchise?
Answer: It varies from company to company. There are many factors to take into consideration like the population of your city and if you are here to build a store or buy it from another owner. It can range from a couple grand all the way to a million dollars.
Question: What are some of the first steps to buying a franchise?
Answer: The first step is to do research and find an open opportunity near you after which you can talk to a business broker.
Question: How do I get the money to buy a franchise?
Answer: Depending on your current financial situation you will be able to get a loan from a bank that deals with the head office of franchisor company.
Question: Which franchise would be best suited for me?
Answer: This depends on where your skills lie. If you are mechanically inclined, then go for an auto shop; if you are more of a manager go into retail etc.
Question: Am I allowed to sell the business?
Answer: If you have done well for several years then you can sell the business like you would do with any other business.
Always do the right research before buying a franchise. It is important to work closely with an accountant and a business broker to determine what is right for you and your skill set. The more you know, the less that can go wrong.