Small Business Vs. Franchising Part 2- Which Do You Want ...

Posted by admin on March 29, 2012

Franchises: Levels of Opportunity
Franchising offers franchisees a level of opportunity which is not possible in regular businesses. A start-up venture with an established brand, as well as with the support of seasoned professionals, is a tremendous advantage to a business person. Yet many do not realize that varied levels of opportunity are available within franchising. Franchisors can offer the ?standard? franchise but there are also additional options for franchisees.
Types of Franchises
?A mini-model ? suitable for those with less capital
?An ?in advance? option ? allowing franchises to take on additional units based on future performance of the first location
?A large territory option ? allowing an entrepreneur to become an area developer
?A master licensing option ? in which an entire country or State is your playing field
Ideally, franchisees should enter at the most suitable level for their skills. Most franchisors will enjoy a challenge but nobody thrives in a business if they feel overwhelmed by the commitment. When you are exploring and comparing different franchises, understanding yourself is an invaluable asset.
Remember that a franchise is a long term commitment ? maybe five or ten years. Although in regards to franchises, ?commitment? can be a relative term. Within the contractual commitment, the standard franchise is five years with the possibility of renewal for every 5 years subsequent to that period. The opportunities for renewal can extend up to a maximum of 15 to 30 years (and possibly ongoing) depending on the particular franchise.
Everyone does not have a clear understanding of franchise licenses. Many individuals are under the impression that franchises extend for an exact 15 or 25 years. Some people believe that franchises do not have an expiry date. The first franchise systems in North America did not have an expiry date. As franchisors leaned more about the industry, they realized that having ?no expiry? date was not favorable to franchising.
The ?lifetime? licenses ran into problems in two specific areas ? locations and losses. When locations began to show signs of age, franchisees lost interest and became complacent about their business. Since a neglected franchise can weaken the entire franchising system, the failing business becomes an impediment to future sales on the customer and franchisee side.
In addition, older contracts neglected to enforce rules and regulations about modernization. New locations did not open and the brand could not experience consistent growth. The whole system was affected in a negative manner. The ?lifetime? licenses resulted in inadequate regional representation and often in failed franchises. Today?s licenses include guidelines which encourage the franchisee to stay current in the modern marketplace.
If current franchisees let their business run down or do not market it in a proper manner, they need not expect a renewal following the five-year period. Modern ?renewable-on-conditions? contracts help protect the investment of the franchisor and the franchisee. These contracts help maintain and increase the value of locations and ensure the health of the franchise. Since franchises are an extremely synergistic setup, the guidelines set up a winning scenario for the entire franchising system. Offering distinct levels of business opportunities, modern franchising is a flourishing industry.

Richard Verkley, the Go-to Franchising Man, is the franchise business expert to go to for all your franchise business opportunity needs. Consistently number one in new franchise sales within numerous small business and franchise opportunities, Richard is renowned worldwide for his expertise in the franchising industry. During his 23 years of experience with every level of franchise opportunity, Richard has received numerous awards including International Master Licensee of the Year and Global Master Franchisee of the Year. The creator of a global business coaching franchise, Richard Verkley is the worlds choice for franchising information and advice.

Source: http://www.auction-endowment.com/?p=268

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