The term is becoming more familiar in Latin America, but what does it really mean to the potential
business owner?A franchise is a license that a company (the
franchisor) grants to a franchisee (you, the investor) to use
the company's brand name and its proven systems and
procedures. Often the more franchisees, the more valuable the
brand name becomes, hence the more valuable each franchisee's
business becomes.
Every franchisee operates his/her business within the
franchisor's quality standards so that customers experience
consistency no matter where they buy the franchisee’s products
or services. This is the strength of a brand name – the customer feels
secure when making a purchase.
The most important thing to understand about buying a
franchise is this: THERE IS NO AUTOMATIC CORRELATION
BETWEEN WHAT IT COSTS TO BUY A FRANCHISE AND HOW MUCH MONEY
YOU WILL MAKE.
When you buy an existing business, the higher the gross
sales of the business, the more you typically have to pay for
it. With a franchise, you are purchasing the blueprint to
build Your Own business, and the cost of starting the business
has nothing to do with the end result or the income potential.
There are many franchises with total startup costs of
$30,000 and under that have the potential to provide you with
an excellent income and the opportunity to build real capital.
The advantage of a franchise is that you will know all the
costs of getting started BEFORE you make your decision to
invest in the business. This Reduces
Your Risk and Increases the Safety of Your Investment.
Franchises are surprisingly affordable investments. Total
investment in most franchises is between $25,000 and $250,000
and in many cases financing is available.
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THE BENEFITS OF OWNING A
FRANCHISE |
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Franchising is a marketing strategy to get a
disproportionately large share of the market. It is estimated
that about 12% of all businesses in North America are
franchised, but they account for 43% of all North American
sales – more than four times their share of the dollars! There
is a reason why franchisees get more than their fair share of
the market: In general, Franchisors offer you:
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Experience: |
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Franchises already have
units operating successfully. This means that you can
avoid expensive start-up mistakes.
Training: You'll be taught what you need to know to start
and to operate the business. |
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Support:
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You will have the advantage of
ongoing managerial, marketing, sales support and research
and development to keep up with changing times and market
conditions.
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Name Recognition:
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Brand names bring more customers into
the business and provide a competitive advantage that
independent units can never afford.
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Advertising:
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Professionally prepared and well
tested advertising can give you a huge advantage in a
competitive market. Co-operative advertising programs with
the company and other franchisees can provide national
exposure at a more affordable price.
Site Selection: You will receive advice in selecting a
site and arranging the interior for your most efficient
usage.
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Speed and
Efficiency: |
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The franchisor will save you time in
starting up so that you can begin working with customers
and clients immediately instead of trying to work out
unforeseen problems.
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Simplicity:
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Franchisors try to keep your business
as simple as possible so that you can concentrate on the
activities that will make you the most money.
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Friendship:
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Because franchises often tend to
attract certain types of investors with similar
personalities and styles of doing business, you will find
many like-minded people in the group. You will be able to
make new contacts that could develop into friendships that
may last a lifetime.
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FINDING THE RIGHT BUSINESS – THERE
ARE LOTS OF CHOICES
There is more to franchising than hamburgers or muffins!
There are over 90 categories of franchise businesses with over
5,000 choices for you. In general, they fall into six main
groups: |
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Food |
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It is the most visible form of franchising, so many people
think this is their ONLY CHOICE. Costs can range from under
$100,000 to $2,500,000 per unit.
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Automotive Services |
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These can include transmission shops, quick lubrications
and filter changes, auto glass repair, vinyl and leather
repair, paint and dent repair, chip repair, tire repair, etc.
Costs range from $25,000 to $250,000.
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Retail Sales |
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Many stores we see in shopping malls are franchises.
Health care stores, apparel, electronics, picture framing,
furniture stores, to name just a few of the many choices.
Because a store usually needs to be remodeled and inventory
purchased, the cost can range from $75,000 to $250,000.
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Business to Business Services |
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This category is often the favorite of people who want a
regular 40 hour work week or LESS. Choices include recruiting
temporary help, employment agencies, printing support
services, sales training, management consulting services,
commercial cleaning and maintenance services, and many more.
Because there is usually no store or inventory, costs can
range from $25,000 to $200,000.
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Personal Services |
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Like business services, most of the franchises in this
sector can be home based or need only a small office. They
provide services such as carpet and upholstery cleaning,
services for the elderly, garden, tree and lawn care, etc.
Costs will be between $20,000 and $150,000.
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Children's Services |
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These services include tutoring, play lands, computer
training, and educational entertainment. Costs commonly range
from $25,000 to $200,000.
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General |
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Sports and tourism, hotel, motel facilities, medical and
cosmetic services, leisure and entertainment, and many, many
more. Here is just a partial list of franchises that function within
the above groups:
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As a general rule, there is practically no business sector
that does not offer franchising. With this abundance of
selection, your Franchise Network International Consultant can explain the pros and
cons of each type of franchise and help you to identify those
that will fulfill your needs.
CAN YOU DO IT? BEFORE INVESTING YOUR TIME AND MONEY IN A
FRANCHISE, BE SURE YOU CAN SAY YES TO THESE QUESTIONS:
Am I willing to take on the responsibilities of managing
my own company? While franchisors provide training and
ongoing support, franchisees must manage their own businesses.
This can mean long hours and hard work. And you must be
willing to perform a broad range of tasks depending on the
type of franchise you select.
Will I enjoy the franchise?
Instead of just looking
through lists of franchises, first determine your business
preferences and interests. Then find the franchise that meets
your criteria. Only then do you commit your money and energy
to the franchise.
Am I willing to follow the franchisor's system?
You
are investing in a franchise to learn the business, and you
are promising your customers that they can expect the same
high quality standards in your business that they will receive
from every other unit of that system. Are you willing to
follow the procedures? If not, do not invest in a system you
will not use – consider starting an independent business
instead.
Am I good at interacting with people?
Your success
depends on your ability to get along well with the franchisor,
other franchisees, customers, and employees. Be sure you will
enjoy and be good at this!
Can I afford the franchise?
Thanks to disclosure
regulations in the United States, you will have a good idea of
the start-up costs. You will also need enough money to run the
business and cover your living expenses until it can bring you
a profit. Experienced franchisees can give you a good estimate
of how long that may take. Plan conservatively.
Do I have family support?
Starting your own
business, franchise or not, is a family decision. Family
members must understand that you will have demands on your
time and that they will need to be supportive of your
decision.
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Franchise Network International CAN HELP YOU! |
Franchise Network International is a member of the Franchise Network
Group, Franchise Network International for short. Franchise Network International is one of the largest
franchise consulting companies in the United States and
combines more than 50 offices in North America, Canada,
Mexico, Malaysia, and Russia.
Franchise Network International is a team of multi-lingual and
multi-cultural business development experts with over 20 years
of experience in assisting US and Latin America companies to
establish successful commercial ventures. These experts will
help you learn about your many choices available and how to
select the right business for YOU.
We are paid by franchise companies who are searching for just
the right people to enhance their type of business. The cost
of a franchise will not change whether you use our services or
not....so LET US HELP!
Find out here
how we do this! |
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