Franchises: Levels of Opportunity
Franchising offers franchisees a level of opportunity which is not possible in regular businesses. A start-up venture with an established brand, as well as with the support of seasoned professionals, is a tremendous advantage to a business person. Yet many do not realize that varied levels of opportunity are available within franchising. Franchisors can offer the standard franchise but there are also additional options for franchisees.
Types of Franchises
A mini-model – suitable for those with less capital
An in advance option allowing franchises to take on additional units based on future performance of the first location
A large territory option allowing an entrepreneur to become an area developer
A master licensing option in which an entire country or State is your playing field
Ideally, franchisees should enter at the most suitable level for their skills. Most franchisors will enjoy a challenge but nobody thrives in a business if they feel overwhelmed by the commitment. When you are exploring and comparing different franchises, understanding yourself is an invaluable asset.
Remember that a franchise is a long term commitment maybe five or ten years. Although in regards to franchises, commitment can be a relative term. Within the contractual commitment, the standard franchise is five years with the possibility of renewal for every 5 years subsequent to that period. The opportunities for renewal can extend up to a maximum of 15 to 30 years (and possibly ongoing) depending on the particular franchise.
Everyone does not have a clear understanding of franchise licenses. Many individuals are under the impression that franchises extend for an exact 15 or 25 years. Some people believe that franchises do not have an expiry date. The first franchise systems in North America did not have an expiry date. As franchisors leaned more about the industry, they realized that having no expiry date was not favorable to franchising.
The lifetime licenses ran into problems in two specific areas locations and losses. When locations began to show signs of age, franchisees lost interest and became complacent about their business. Since a neglected franchise can weaken the entire franchising system, the failing business becomes an impediment to future sales on the customer and franchisee side.
In addition, older contracts neglected to enforce rules and regulations about modernization. New locations did not open and the brand could not experience consistent growth. The whole system was affected in a negative manner. The lifetime licenses resulted in inadequate regional representation and often in failed franchises. Todays licenses include guidelines which encourage the franchisee to stay current in the modern marketplace.
If current franchisees let their business run down or do not market it in a proper manner, they need not expect a renewal following the five-year period. Modern renewable-on-conditions contracts help protect the investment of the franchisor and the franchisee. These contracts help maintain and increase the value of locations and ensure the health of the franchise. Since franchises are an extremely synergistic setup, the guidelines set up a winning scenario for the entire franchising system. Offering distinct levels of business opportunities, modern franchising is a flourishing industry.
Month: August 2018
Avail Franchising Consultants for Profitable Business
Franchising consultants are the medium between franchisee and the franchisors. They act as the link between these two entities. By transferring the rights to other investors to use your business name, model and replicate the same in their own outlet, franchising enables the growth of the business.
Without having to worry about coming up with your own business model, having a franchise is a great way to start a business. You have the convenience of having an established and recognized brand to develop when you have a franchise, plus the support of a head office that will help you succeed. To pick one of the best franchises to own so you can have a business that is sure to succeed is the key to your success.
The entry of franchise consultants in the market has been mainly influenced by increased profitability in franchising. The franchising consultants get money by charging fees on every franchisee they bring to your franchising business. When the agreement contract is signed, the franchisors pay these consultants. To determine what kind of business they are interested in and to determine what kind of business actually suits their profile, the candidates are questioned in length by the franchise consultants. Thus, businesses pay good referral fees for each deal that is closed effectively and realize the role of franchise consultants.
Franchising can be quite challenging. Franchising consultants lead you through the intricacies of franchising to achieve desired results, in case you are about to franchise your business. To find potential franchisors, franchisees contract the consultants. Franchisers contract franchise consultants to find potential franchisees on the other hand. The franchise consultants are in business to serve both the franchisor and the franchisee, they are in business. It is important to seek the help of franchise consultants, after having decided to buy a franchise. In terms of costs, visiting a consultant is the same as going directly to the franchiser. They will assist you in making the correct decision. They will also assist in identifying lucrative potential franchise opportunities. They bring the franchisees and the franchising company close together. The type of business that suits you and your needs should be decided on your decisions. A good guide about the franchise business can be given by competent consultants. On franchising basics such as how the process works and business system, they are supposed to guide you. To understand prospective franchise candidate needs, his financial capital available, if the business offered is viable and if the candidate can make a success of it, franchising consultants have to be very careful and analyze the prospective franchise candidate. If he is not suitable for that business, they have to be realistic and make quick judgments and tell a candidate not to go for a business. For recommending bad prospects to clients just to make a hefty commission for themselves, some franchise consultants get a bad reputation. Your primary duty is to help people get the right kind of business, therefore try to be honest. Do not make a profit selling loss making businesses.
About Author:- Sparkleminds consists of individuals who are expert franchising consultants. Their expertise in franchise consultancy aims at converting any kind of traditional business into a franchise business. This particular article illustrates these aspects further.
Jewellery Franchise A Lucrative Business Option For Women Entrepreneurs
With the advent of the 21st century and the popularity of franchising business in India, women have now changed from homemakers to successful business owners. Women franchisors are steadily on the rise and gaining prominence in the male dominated business area and especially in jewellery industry, women are doing wonders. In India, key players like Gitanjali Gems Franchise and Gitanjali Jewels Franchise have made a huge contribution in popularizing jewellery franchise concepts in India. Both Gitanjali Gems and Gitanjali Jewels are leading jewellery brands in India and have their franchised outlets in different corners of the country.
As we all know, franchising is a way or method of doing business and expanding the successful business through its channel partners called franchisees. And this concept was very well adopted by Gitanjali Franchise brand. According to a recent study, there are many jewellery franchised outlets managed by women in India. This is mainly because women are hugely interested in jewellery sector. They are always conscious of their looks as compared to men and jewellery items add to their beauty. They have the innate talent for latest fashion in jewellery as well as other beauty accessories.
Gitanjali Franchise understands the fact clearly that the fairer sex is endowed with innate passion for jewellery and it is only due to their in-depth understanding, they can successfully manage and run a jewellery franchise outlet. In recent times, a lot of women franchisees have entered franchising by taking Gitanjali Gems Franchise and Gitanjali Jewels Franchise.
There are many benefits of Gitanjali Franchise, such as:
-The business concept of Gitanjali franchise is successfully tested and with years of experience in the sector, they offer the best franchise proposal in the jewellery segment.
-Both Gitanjali Gems Franchise and Gitanjali Jewels Franchise have strong brand image in the market and this allows the franchisees to exploit new market and earn profit.
-Strong advertisement support by the franchisors. Through electronic, print or online advertising, Gitanjali brand has a strong hold in the market. Here the franchisees dont have to think about think about marketing and advertising of the brand.
-Being the only franchise of exclusive gold and silver jewellery design and customization of unique jewellery, huge traffic of customers are guaranteed throughout the year.
-Gitanjali Franchise offers all the support and training to open and manage a franchise outlet successfully.
These benefits make women investors and aspiring investors to invest in a Gitanjali franchise business. Also remember that earlier, people used to buy jewellery only on special occasions like wedding, birthdays, engagements or during festival seasons. But today, the scenario is not so as with the coming up of organized jewellery players, people prefer to buy jewellery at any time of the year.
Hence, if you are also an aspiring woman entrepreneur, then jewellery franchising offers you the best way to move forward with your dream of running and managing your own business. Investing in Gitanjali Gems Franchise and Gitanjali Jewels Franchise can be most rewarding career option for you to consider. Take a step further with Gitanjali franchise and bring a positive change in your life.
Franchising Issues That Your Franchise Solicitors Can Help With
Taking the option of franchising can be a positive move, however it is a move that is not suited to every type of business.
This article looks at some of the things you should definitely think about when considering going into a deal as a franchisee; if you have questions or are confused, your franchising solicitors will be able to provide you with more information.
Costs and financing
As any franchise solicitor will tell you, one of the most important issues you need to consider with any business deal is how much it costs and how you are going to pay for it. When you are thinking of becoming a franchisee, you need to know where your financing is going to come from as it is more than likely you will have to buy in to the agreement. This could be more than 45,000 depending on the business, so it is definitely something to consider.
As well as the initial start-up costs, you also need to think about your long-term running costs as you need to know you will be able to make ends meet while you get everything up and running, just as you would with any other business.
The franchise itself
You should also think about the company you are planning to make an agreement with. What industry are they in? Do you have experience in that industry? Does the company have a good reputation? If the company already has franchisees, it can be a good idea to talk to them so you can get a better idea of what it might be like if you decide to go ahead with an agreement.
Length of the agreement
The length of the contract is another important issue to consider before going ahead with any agreement. Some contracts are relatively short (up to three years, for example), while others lock you in for a decade or more so you should think about what you want before signing anything. Your franchising solicitors will be able to talk you through your options.
Who has control?
What you actually get for your money is important, too, as some franchises offer their subsidiaries more control than others. You need to know who would have financial responsibility for things such as uniforms and training, as well as how much creative discretion you’d be allowed, as some companies are stricter about following precise business plans than others.
Intellectual property
Intellectual property advice is another issue it’s worth thinking about as trademarks, training manuals, promotional material and more all fall under this banner and so licenses need to be sorted out for the franchisee. In fact as franchising has sometimes been described as “renting a brand”, issues about branding are critical – so you will need to make sure that you get expert intellectual property advice as part of your legal package from your solicitor. This is something your franchise solicitor will be able to guide you through to make sure you understand what’s happening.
Deciding On How To Finance A Franchise Canadian Franchising Business Loan Info On Financing And L
Not only do you want to have a solid plan when you want to finance a franchise in Canada – it sure helps when that plan makes sense for the business financing loan / loans that you need!
We think that most Canadian entrepreneurs who are either first time franchisees or perhaps are adding another location to their business would agree that its not as important as to where the franchise lending and business funding comes from, but that you get the full funding at terms that make sense for you personally .
Let’s examine some of those key decision points and requirements that you need to fulfill a proper franchise financing solution in Canada.
We think that a lot of franchisees are sometimes overly focused on ‘ the interest rate ‘ when they are seeking a franchise loan. That’s human nature we guess, but the reality is that the loan is simply commensurate with your overall credit quality and in line with the types of financing that are out their in the Canadian business financing market – unfortunately that market for new franchisees is somewhat more limited that in the U.S.
In Canada franchises are financed really in only 3 or 4 different manners — actually 5 we could say if you considered financing the whole franchise yourself through personal savings.
While that might seem a good idea we think in many cases it is not for a variety of reasons – i.e. collapsing personal investments and savings and assets when you don’t have to cant be an overall great strategy. We spoke awhile back to a franchisee who had pledged and used all his personal assets to acquire a franchise – business was slow, and he was unable to secure additional outside financing to re- boot the business because all his personal assets were pledged/gone. Bottom line, not recommended!
So the question then becomes as to how you decide to finance a franchise once you have made that acquisition decision. We’d like to share a couple key points. First of all, whether it’s a franchise or any business whatsoever, it’s financed by two guys, debt, and equity; i.e. what you borrow and what you put in yourself. Spend some time determining the optimal mix and you will best be able to gravitate to the right financing strategy.
In Canada these days we see franchisees putting in anywhere from 10 -50% as their personal investment into the business. Whats the perfect number? The reality is there isn’t one, because each business requires a different amount of financing and has a different mix of assets and financing needs. The key assets and financing needs in franchising are all your initial soft costs, such as the franchise fee, and then comes your costs to open the door, often called the ‘ turnkey ‘. That turnkey component consists of equipment, leaseholds and opening working capital.
We spoke of 4 methods of franchise financing in Canada .Those are as follows : Specialized commercial finance firms that have dedicated franchise finance divisions , Equipment financing, Working Capital term loans as a supplement to your overall financing, and finally the BIL/CSBF loan . The latter is the government SBL loan that is used by hundreds, probably thousands of franchisees to acquire their franchise. It only has one or two limitations, one of which is that it caps out at 350k, but that certainly covers a lot of franchises in Canada in different industry segments – examples restaurants, service businesses, etc.
So, today’s bottom line? Simply that spending some quality time early on in the process in understand which of the 4 options makes sense for you is a valuable investment. That time, coupled with your business plan and financial projections will help you ensure that you have the right mix of financing solution, as well as a properly chosen business loan strategy for your franchise.
Speak to a trusted, credible and experienced Canadian business financing advisor on how to best decide which financing mechanism works for you.