BUYING A FRANCHISE

BUYING A FRANCHISE
BY: MATT BACAK
is not for everyone. this guide will help you
evaluate whether buying a franchise is right for
YOU. IT WILL HELP YOU UNDERSTAND YOUR
obligations as a franchise owner. many people
dream of owning and running their own business
BUT ARE OFTEN LET DOWN BY THE REALITY OF DOING
so.
by purchasing a franchise, you often can sell
GOODS AND SERVICES THAT HAVE INSTANT NAME
recognition and can obtain training and ongoing
support to help you succeed. but be cautious.
LIKE ANY INVESTMENT, PURCHASING A FRANCHISE IS
not a guarantee of success.
a franchise typically enables you, the investor
OR "FRANCHISEE," TO OPERATE A BUSINESS. BY
paying a franchise fee, which may cost several
thousand pounds, you are given a format or
SYSTEM DEVELOPED BY THE COMPANY ("FRANCHISOR"),
the right to use the franchisor's name for a
limited time, and assistance.
WHILE BUYING A FRANCHISE MAY REDUCE YOUR
investment risk by enabling you to associate
with an established company, it can be costly.
YOU ALSO MAY BE REQUIRED TO RELINQUISH
significant control over your business, while
taking on contractual obligations with the
FRANCHISOR.
outlined below are some of the main points you
need to consider before buying a franchise:
- FRANCHISE FEE: YOUR INITIAL FRANCHISE FEE,
which may be non-refundable, may cost several
thousand to several hundred thousand pounds.
- ROYALTY PAYMENTS: YOU MAY HAVE TO PAY THE
franchisor royalties based on a percentage of
your weekly or monthly gross income. you often
MUST PAY ROYALTIES EVEN IF YOUR OUTLET HAS NOT
earned significant income during that time. in
addition, royalties usually are paid for the
RIGHT TO USE THE FRANCHISOR'S NAME.
- advertising fees: you may have to pay into an
advertising fund. some portion of the
ADVERTISING FEES MAY GO FOR NATIONAL ADVERTISING
or to attract new franchise owners, but not
necessarily to target your particular outlet.
- CONTROLS: TO ENSURE UNIFORMITY, FRANCHISORS
typically control how franchisees conduct
business. these controls may significantly
RESTRICT YOUR ABILITY TO EXERCISE YOUR OWN
business judgment.
- terminations and renewal: you can lose the
RIGHT TO YOUR FRANCHISE IF YOU BREACH THE
franchise contract. in addition, the franchise
contract is for a limited time; there is no
GUARANTEE THAT YOU WILL BE ABLE TO RENEW IT. A
franchisor can end your franchise agreement if,
for example, you fail to pay royalties or abide
BY PERFORMANCE STANDARDS AND SALES RESTRICTIONS.
if your franchise is terminated, you may lose
your investment. franchise agreements typically
RUN FOR 15 TO 20 YEARS. AFTER THAT TIME, THE
franchisor may decline to renew your contract.
before investing in a particular franchise
SYSTEM, CAREFULLY CONSIDER HOW MUCH MONEY YOU
have to invest, your abilities, and your goals.

about the author:
matt bacak became "##1 best selling author" in
JUST A FEW SHORT HOURS.
recent entrepreneur magazine's e-biz radio show
host is
TURNING AUTHORS, SPEAKERS, AND EXPERTS INTO
overnight success stories.
discover the secrets http://promotingtips.com
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