Thursday, January 28, 2010

Franchise is the best way to BE YOUR OWN BOSS

“Franchise Opportunities – Be your own Boss”

FRANCHISE: A form of business organization in which a firm which already has a successful product or service (the franchisor) enters into a continuing contractual relationship with other businesses (franchisees) operating under the franchisor's trade name and usually with the franchisor's guidance, in exchange for a fee. A franchise is a right granted to an individual or group to market a company's goods or services within a certain territory or location. Some examples of today's popular franchises are McDonald's, Nakshatra, Subway, Domino's Pizza, and the UPS Store. An individual who purchases and runs a franchise is called a "franchisee." The franchisee purchases a franchise from the "franchisor." The franchisee must follow certain rules and guidelines already established by the franchisor, and the franchisee has to pay an ongoing franchise royalty fee, as well as an up-front, one-time security fee to the franchisor. Franchising has become one of the most popular ways of doing business in today's marketplace.

History: Franchising began back in the 1850's when Isaac Singer invented the sewing machine. In order to distribute his machines outside of his geographical area, and also provide training to customers, Singer began selling licenses to entrepreneurs in different parts of the country. In 1955 Ray Kroc took over a small chain of food franchises and built it into today's most successful fast food franchise in the world, now known as McDonald's. McDonald's currently has the most franchise units worldwide of any franchise system. Today, franchising is helping thousands of individuals be their own boss and own and operate their own business. Franchising allows entrepreneurs to be in business for themselves, but not by themselves. There is usually a much higher likelihood of success when an individual opens a franchise as opposed to a mom and pop business, since a proven business formula is in place. The products, services, and business operations have already been established.
Advantages: Corporate image, brand name recognition, established market, set standards of operations & training, set instructed infrastructure, off course a better chance of success and immensely profitable venture.

Disadvantages: limited ownership, ongoing cost franchise fees & percentage of your franchise’s business revenue, additional charge such as cost of advertising, besides most well known franchises are too expensive.

Different types of Franchising: There are many different types of franchise ownership opportunities. You may choose to become a multi-unit franchise owner, an area developer or you may decide to buy an existing franchise. Each ownership opportunity has its own unique responsibilities. The following is a list of the many different ownership opportunities franchising offers. 1) Single Unit Franchise: It is the most likely place a brand new entrepreneur would begin, as the franchisee would be responsible only for running one unit, although he or she would extremely involved with all the daily operations of the business. 2) Multi-Unit Franchise: multiple units are sold at a reduced rate per unit by the franchisor. 3) Area Developer: area development is similar to multi-unit franchising; the only difference is that it typically involves greater number of outlets encompassing a larger geographic territory. 4) Master Franchise: allows people or corporations to purchase the rights to sub-franchise within a certain territory. A master franchisee helps the overall franchise company by recruiting franchisees to open units within a specific territory. One master franchise is for one state only. 5) Buying an Existing Franchise: many franchise owners decide to sell their franchises after they have opened.

Approach: One need not to surprise if the franchisor questions include detail information about the proposer and his spouse financial position, experience, background, and even aspirations, questions designed to help the franchisor determine whether or not the kind of person he or she feels will be able to run the business successfully and fit into the franchise model. The franchisor will continue to explore interest, commitment and suitability of the proposer. If the franchisor decides a suitable franchisee, he will be offered a franchise contract that lays out the obligations of both parties. Like any other contract, some aspects of it may be open to negotiation. And like any other contract, if there are any promises made about the franchisor/franchisee relationship that are not in the franchise contract, get them written in. One must consult an advocate before signing the contract. Buying a franchise is like buying any other kind of business. An entrepreneur has an opportunity to startup from Rs.10, 000/- in education to Rs 01 crore in jewellery as an initial investment in India. Naming few companies extending franchise opportunities; Levi's, Peter England, Belmonte, D'damas, Nakshatra, Kidzee, Eurokids,Amson, BodySpa, MovieMart, Silversand etc

Raghvendra, Jodhpur, Rajasthan