Buying a Franchise

Buying a franchise 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.

You may freely reprint this article provided the author's biography remains intact:

John Mussi is the founder of Direct Online Loans who help UK homeowners find the best available loans via the http://www.directonlineloans.co.uk website.

In The News:

Small Business Hiring Slows  The Wall Street Journal

Three Ways to Add Leverage to Your Small Business

Remember those drawings from science class of how a lever... Read More

Mobile Car Washes and Shoe Policies

Mobile carwashing is hard work, it is tough on the... Read More

Expand Your Professional Organizer Business

Grow your Professional Organizer business by branching out into related... Read More

13 Steps to Protect Yourself from Your Bank

The success of your business is critically dependent on how... Read More

Virtual Assistant ? Questions Answered

What is a Virtual Assistant?A Virtual Assistant is a person... Read More

Taking Stock

Back when I owned an inventory-based business, one of my... Read More

Site Selection - Slice of Life, A Car Wash and Detail Center DownTown

There is a continual trend we are seeing which I... Read More

Street Wars Between Mobile Car Washers and Mobile Auto Detailers

There is much competition in the mobile auto detailing business.... Read More

The Role of the Business Model and Strategy for Business

People will always stress that having a well researched business... Read More

Building Your Business for Success in 2005

It's a strange anomaly.Most people who set out to start... Read More

How To Choose A Franchise

You'd like to go into business for yourself, and believe... Read More

How to become a Career Coach for Profit

A career coach could be simply defined your job seeking... Read More

Truck Wash Business Case Study

Often smart entrepreneurs look for out of the way businesses,... Read More

Awning Cleaning Business Case Study: Entrepreneurship 101

It is most fascinating to study how entrepreneurs spot opportunity... Read More

Do I Have to Do EVERYTHING Myself?!

The air in my client's office nearly crackled with her... Read More

Franchises Offer Shortcuts, But Not Control

Q: I will be retiring this year at age 60... Read More

Starting a Small Business: Balancing Risk and Reward

In a perfect world, starting a small business would be... Read More

Getting Grant Funding For Your Nonprofit Organization

Do you need grant funding for your nonprofit organization? If... Read More

Using Technology to Manage Customer Loyalty

Don't let your customer satisfaction research initiative collect dust on... Read More

Reverse Merger: Have They Taken the Reverse out of Reverse Merger?

Are the promoters and consultants destroying the market for Reverse... Read More

Breaking The Chains!

Everyday, customers and business owners are bombarded with billboards, logos,... Read More

Find Your Niche & Follow It - Part 1

In this series of articles I'm going to show you... Read More

Lubbock TX Good Market for a Service Business

We very much like what we see in Lubbock, TX... Read More

Who Does Over Disclosure Really Hurt In Franchising?

Costs of over regulation and over disclosure end up hurting... Read More

Self-Employment: Managing Your Money: Tips for Living with a Fluctuating Cash Flow (Part One)

The way you manage your money is one of the... Read More