Wednesday, October 15, 2008
Starting a new business can be a scary experience and developing a working business plan that requires a lot of faith can be dangerous if there have been mistakes made. Some people will have no trouble finding financing for their proposed business, yet they are still hesitant to jump into untested waters unsure of how their products or services are going to accepted by their targeted customers. While it will require giving up a lot of the individualized ownership of a business, an individual can look into franchising to reduce the unease of starting a new business venture. Most successful franchisors already have a successful business model that works as well as distribution and supply networks that have been proven to work. Buy a franchise into an established business gives the franchisee the rights to use the name and reputation of the company while sacrificing true ownership of the business.
Franchise owners own the rights to use the name and all associated trademarks but that is where there rights end. If they a restaurant franchise for instance, they will be selling the exact same foods cooked the exact same way as all of the other restaurants belonging to the chain. Failure to buy their supplies from the franchisor or their approved vendors can lead to the loss of their franchise license. They are also usually prohibited to add anything to the menu with the franchisor's permission.
In addition to the initial franchise fee, there is typically a monthly fee charged by the company for continued use of their name. For most companies these fees are not only for the right to use the name but also for advertising and marketing conducted by the main company. It can also go to help pay for special promotions and other benefits stemming from the umbrella company's efforts. Franchises are not only for individuals as some unrelated companies are jumping on the bandwagon to expand the services offered to their customers. Travel centers for example, have moved away from having an in-house restaurant and have bought franchises of some of the more popular eateries.
By owning the franchise, these companies not only provide a service to their customers, they also help improve their income levels at the location. The eatery's corporate development provides all the product and advertising while the business operates the location and collects the revenue. These businesses may also own different franchises at different locations of company-owned locations, hoping to offer a variety to their customers.
Franchise owners own the rights to use the name and all associated trademarks but that is where there rights end. If they a restaurant franchise for instance, they will be selling the exact same foods cooked the exact same way as all of the other restaurants belonging to the chain. Failure to buy their supplies from the franchisor or their approved vendors can lead to the loss of their franchise license. They are also usually prohibited to add anything to the menu with the franchisor's permission.
In addition to the initial franchise fee, there is typically a monthly fee charged by the company for continued use of their name. For most companies these fees are not only for the right to use the name but also for advertising and marketing conducted by the main company. It can also go to help pay for special promotions and other benefits stemming from the umbrella company's efforts. Franchises are not only for individuals as some unrelated companies are jumping on the bandwagon to expand the services offered to their customers. Travel centers for example, have moved away from having an in-house restaurant and have bought franchises of some of the more popular eateries.
By owning the franchise, these companies not only provide a service to their customers, they also help improve their income levels at the location. The eatery's corporate development provides all the product and advertising while the business operates the location and collects the revenue. These businesses may also own different franchises at different locations of company-owned locations, hoping to offer a variety to their customers.
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