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To_Open_or_Not_to_Open_a_Major_Franchise_Business
| To Open or Not to Open a Major Franchise Business
If you are tired of working for someone else and exploring
opening and running your own small business, you are probably
confused about the multitudes of available business
possibilities. To make matters worse, authoritative voices
differ in their opinions of whether opening a major franchise
business is preferable to starting an independent business.
As an owner of nine franchise businesses, I have personally
experienced the benefits as well as the limitations of opening
and running franchise businesses. The following is a list of
pros and cons of owning a major franchise business.
1.(Pro) Pre-existing building layouts and décor requirements
lesson start-up confusion and facilitate quicker and easier
start-ups.
Many pre-existing franchisors “The Franchise Giver – Big Daddy”
usually equip their new franchisees “You – The Little Fish” with
possible layout and decor drawings and requirement spec sheets,
thus taking the guesswork and hassle out of trying to figure out
how you are going to build-out and equip your new business.
2.(Con) Loss of creative control over business layout and décor
appearance.
The benefit of being told where and how to build and place
everything comes with loss of freedom you may want to express
your creative decorative expression in your business. If you
want to decorate your business with freedom, research the
franchise décor rules and regulations before you purchase a
franchise.
3.(Pro) Franchise agreements and structures set up to save you
money on business, service or food products.
Because of the greater number of franchises, “Big Daddy” usually
has arranged cheaper national contracts wherein you can get
certain services, business or food products at a significantly
reduced price. You get to save money.
4.(Con) The products and/or services you provide are regulated
and controlled by “Big Daddy”.
These cheaper prices are usually accompanied with regulation and
control by the franchisor as to what type of products and
services you can or cannot purchase. In other words, “Big Daddy”
tells you what you can or cannot buy and from whom.
5.(Pro) National Advertising included.
Well known, established franchises typically have a National
Advertising campaign in place that provides TV, radio, and
printed material advertising. This way, you don’t have to spend
a lot of your own money locally advertising your business.
6.(Con) Loss of promotion/advertising freedom.
Great national advertising promotions are typically accompanied
by blanket: “You will promote this product or service during
this campaign” ruling. Hopefully, their advertising campaigns
will make sense, won’t cost you too much money, and bring in
more business. Sometimes it works and sometimes it doesn’t.
7.(Pro) Name recognition.
Who has not heard of Baskin Robbins, Subway or GNC? If you
haven’t, you’ve been living in a cave. Franchises typically have
wonderful name recognition benefits to them. In other words,
people will actively seek out a particular franchise wherever
they go.
8.(Con) Customer holds other franchise experiences against YOU.
If a customer has had a bad experience at one franchise
location, he tends to hold all of the other franchise owners
responsible for that one bad experience somewhere else. In other
words, I’ll never go to another Subway because I didn’t like the
meatball sub I got at Joe Blow’s location.
9.(Pro) Potential for higher sales.
With the national advertising campaigns and name recognition,
your franchise business has a better potential for much higher
sales than a similar business with a no-name, no experience
rating history.
10.(Con) Handing over a percentage of your sales to “Big Daddy”.
Yeah, higher sales! But ouch, you have to hand a large bulk of
your sales over to “Big Daddy”. For every dollar you earn, your
franchise fee rips away anywhere from .04¢ to .25¢. Pull your
wallet out and hand it over to “Big Daddy”.
As with any situation in life, there are resulting pros and
cons. Simply study the nature of the franchises completely and
talk to other franchise owners to get a feel of whether you will
want to purchase that particular franchise. If it’s a good fit,
go for it!
Good luck and good business!
About the author:
As a Mind Power Leadership coach, trainer, and speaker, Ronya
Banks has helped others become leaders and business owners since
1992. Frequently featured in radio, magazine and newspaper
articles and interviews, Ronya helps you find the great leader
within by accessing the natural power of your minds. Discover
more of Ronya’s proven leadership success secrets by subscribing
to her Mind Power Leadership ezine newsletter at:
http://www.livinginaction.com/newsletter.cfm.
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