What is franchising?
Franchising is a method of distributing products or services. The franchisor lends his trademark or trade name and a proven business system. The franchisee pays a royalty and an initial fee for the right to do business under the franchisor’s name and system. The goal of any franchise should be to create a win-win situation for both parties.
How does a franchise chain start?
If someone starts a restaurant and the restaurant is busy all the time, it makes sense to think of expanding. If the entrepreneur still wants to expand but does not have the capital or time to operate additional stores himself or herself, he or she may decide to “franchise” the store name and business system to an independent business person known as a franchisee. In return, the entrepreneur may ask for an initial fee and/or a continuing royalty payment based on a percentage of that franchisee’s sales. This is how McDonalds, Tim Horton’s and all the other large franchises started, with one successful location.
Checklist before buying a franchise:
- The type of experience required in the franchised business;
- A complete understanding of the business;
- The hours and personal commitment necessary to run the business;
- Who the franchisor is, what its track record has been, and the business experience of its officers and directors.
- How other franchisees in the same system are doing;
- How much it’s going to cost to get into the franchise;
- How much you’re going to pay for the continuing right to operate the business;
- If there are any products or services you must buy from the franchisor and how and by whom they are supplied.
- The terms and conditions under which the franchise relationship can be terminated or renewed, and how many franchisees have left the system during the past few years;
- The financial condition of the franchisor and its system.
How much does it cost to get help finding a franchise?
Our services are free to anyone looking to buy a franchise.
How will The Wealthy Franchise save me money?
We begin by educating you about franchising; by helping you research your business; by identifying the right structure and strategic mix of the businesses you are interested in; and by introducing you to the franchisors that fit your model. Instead of going from place to place, you can get all of this information right here from us. This saves you time and money.
We’ll encourage you to thoroughly research any franchise that you are investigating, and we’ll even help you find franchise attorneys and other advisors so you can gain more information before you buy.
We believe that the more you know, the better the odds are that the choice you make will be a good one. As a result, we stress that you spend the necessary time to research before you buy. Once you’ve bought the business, it’s too late to change your mind.