Saturday, March 20, 2010
How to Buy a Franchise in a Down Economy
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EDEN PRAIRIE, MN – (November 4, 2008) With inflation rising and consumer spending continuing to drop, can it really be a good time to buy a franchise?
“Yes,” said FranChoice President Lori Kiser-Block. “While the headlines concentrate on what isn’t working in our economy, there are still plenty of businesses that are thriving. If you know what to look for in a franchise business, you can actually take advantage of some aspects of the current economic environment to lower your start-up costs.
“For example,” said Kiser-Block, “current low interest rates can mean that borrowing money for your purchase will cost you less. A higher unemployment rate means you will have more good employees to choose from to help you run your business. You may also find that you can now buy or rent business property at a better price than you could have in the past.”
The key to finding a viable business in this economy, suggests Kiser-Block, is to choose a business that fulfills a need for consumers that cannot be put off until better times.
“Think about what you can and cannot live without,” said Kiser-Block, “and you’ll have an idea of business that can do well even in a slow economy.”
One example of a franchise business that has continued to prosper includes disaster restoration companies that help a homeowner after a fire, flood, or even a hurricane. When your home is filled with water, you need to take care of it immediately.
“Service businesses tend to be more recession-resistant,” says Kiser-Block, “as they provide something you either can’t or don’t want to do for yourself. Whether it is tax preparation, senior care, child care, or home maintenance, these are services people need.”
Kiser-Block offers these suggestions for starting a business in a shaky economic environment:
· Pick a recession resistant business, such as one providing a needed service to the community.
· Look for businesses with low start-up costs. The less you pay to begin the greater your chances of reaching profitability.
· Don’t discount service businesses because they aren’t “sexy.” They are among the best values among franchises because of their lower entry cost, high demand and good margins.
· Look for a franchisor that has a very strong executive management team with experience, wisdom and strategic vision in their specific industry.
· Search for an established franchise with a number of happy franchisees. The more you can learn about the business from those working in it, the better decision you will make. Choosing an established franchise may also lower the risk of your investment.
· Current franchisees will be your most accurate source of information about a franchise opportunity. Ask how they are doing in the current economy.
· Financing a new business can be more difficult during a recession. Use the resources available from a business funding specialist (Guidant and FranFund are two examples) if needed, that can help you find the best method of borrowing money for your circumstances.
“If business ownership is something you’ve dreamed about,” said Kiser-Block, “you don’t need to wait for the economy to turn around. Definitely pay attention to trends in business (such as senior care and business that help the environment) but steer clear of franchise fads. If you choose carefully and wisely, your new business could bring you success even in this economic climate.”
About FranChoice
FranChoice is a national network of consultants dedicated to helping consumers find their ideal match in a franchise business. Since 2000, FranChoice consultants have helped over 40,000 people identify and investigate the perfect franchise for them through their free service. For more information, go to www.franchoice.com.
(ArticlesBase SC #636597)
Labels: buy a franchise, economy franchise, franchise dawn economy
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10 Reasons to Buy a Franchise
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Are you thinking about buying a franchise but you're not sure if the idea is a good one? Here are ten good reasons to go ahead and pursue your dream of owning a successful business.
1. Proven business: Opening a franchise comes with the advantage of knowing that this business has been successful in other locations. The idea and process of running this business have already been proven. Therefore the learning curve in operating the business can be virtually eliminated.
2. Lower risk: Risk of failure is lower with a franchise than starting a brand new business. There is a much higher likelihood of success if the same business has done well in other areas.
3. Established customer base: The brand name that comes with the franchise is already recognizable to consumers, without the franchisee (purchaser) having to spend a lot of money and time in establishing a new brand. The brand awareness provides security and trust to the customer who expects uniform quality to be provided. Therefore a customer base is already established.
4. Marketing: The franchisee can benefit from any advertising or promotion that the franchisor (owner of the franchise) does at the national or local level, without absorbing the cost. The franchisor can also provide input to the franchisee on a local marketing plan.
5. Initial and ongoing support: Training and support is usually part of the deal. Since the franchise company has a vested interest in how well you do, ongoing training, system upgrades, product enhancements, and question and answer resources are provided. The franchisor offers experience to franchisee in such areas as accounting procedures, personnel and facility management, and business planning.
6. Exclusive territory: Rights are exclusive for the territory, with no other franchises sold in the same area as competition.
7. Ease of funding: Many times obtaining financing for a franchise is easier since the franchise name and reputation are usually recognized by the lenders. Therefore, banks are more likely to fund the franchisee.
8. Purchasing power: Relationships with suppliers are already established; affording the opportunity to buy in bulk, enabling a great deal of savings for the business.
9. Pre-purchase information and research: The potential franchisee can make an informed decision because of information that can be obtained prior to purchase. The Federal Trade Commission requires franchisors to provide the franchisee with certain information including the company's history, information about the officers, litigation history, audited financial statements, the franchise agreement, and a current list of franchises with owners' names and contact information.
10. Solid economic niche: Franchises cater to consumers' specialized needs. Consumers tend to prefer doing business with companies that meet their specific needs and the franchise industry has been fitting the bill.
Whether you purchase a franchise in an existing location or take on a new territory, the investment can prove to be well worth your while. If you are looking for more franchise information there are many web sites that offer free contact information for many franchises. FranchiseInformation.us offers free contact information so you can contact the franchisor directly.
(ArticlesBase SC #171737)
Labels: buy a franchise, franchise buy, reasons franchise
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You Should Know This Before You Buy a Franchise
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Franchise businesses such as Wendy's, McDonald's and Jack-In-The-Box are booming. The people setting up franchise ideas and businesses know a good thing, and are really promoting this idea. Franchises for just about every conceivable kind of business are being sold in ever increasing numbers.
Some franchises are very good. They treat both the franchisor and the franchisee very well. Others are very one-sided. Still others are almost total rip-offs that trap one into paying ten to fifty times the actual value of the business idea, equipment, or what ever it is they are trying to get you to buy.
Before putting any money into a franchise, you should investigate everything completely. We've prepared a list of questions you should be asking, and should get satisfactory answers to before investing.
1. Has your attorney studied the franchise contract, discussed it completely with you, and do you both approve it without reservations?
2. Does the franchise require you to take any steps which are either illegal or even border on illegal, or are otherwise questionable or unwise in your state, county or city?
3. Does the franchise give you an exclusive territory for the length of the franchise period, or can the franchisor sell a second or third franchise in your territory?
4. Is this franchisor connected in any way with any other franchise company handling similar products or services?
5. If you answered yes to the above question, what is your protection against the second franchising company?
6. Under what circumstances can you end the franchise contract, and at what costs to you?
7. If you sell your franchise, will you be compensated for your goodwill or will it be lost to you?
8. How many years has the firm offering you the franchise been in operation?
9. Does the company offering you this franchise have a reputation for honesty and fair dealing among its franchisees?
10. Has the franchisor shown you any certified figures indicating exact net profits of one or more of its members, and have you personally checked the figures with these people?
11. Will the franchisor assist you with: a) A management training program; b) An employee training program; c) A public relations and advertising program; d) Capital; e) Credit; f) Merchandising ideas?
12. If needed, will the franchisor assist you in finding a suitable location?
13. Is the franchising firm adequately financed so that it can carry out its stated plans?
14. Does the franchisor have experienced management, trained in-depth?
15. Exactly what can the franchisor do for you that you cannot do for yourself?
16. Has the franchisor investigated you carefully enough to assure itself that you can successfully operate at a profit to both of you?
17. Does your state have a law regulating the sale of franchises, and has the franchisor complied with that law to your satisfaction?
18. How much equity capital will you need to purchase the franchise and operate it until your income equals your expenses?
If you can get the answers to each of these questions, and those answers satisfy you, then you're probably thinking about buying a pretty good franchise deal. However, if you're in doubt about any of these points, be sure to check it out and know the answers for certain before you invest or sign anything.
Buying a franchise can give you a measure of security, and in some cases, sure-fire profits. Business surveys show that fewer than 20 percent of all new franchised businesses fail. This is in comparison to a 60 to 80 percent failure rate for all new businesses started in this country each year.
Information regarding specific franchising ideas can be found in the franchising directories, which are generally available at the local library. Often there will be a notice posted in franchise outlets themselves.
If you can afford the entry into this business, statistics are on your side. You are now armed with some CAUTION and STOP and GO.
(ArticlesBase SC #423177)
Labels: before franchise, buy a franchise, franchise buy
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Top Reasons to Buy a Franchise Business
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As a franchise sales consultant and Business Broker one of the most frequent questions I receive from individuals who are considering becoming a business owner is why should I buy a franchise versus starting a new business from scratch.
My answer is that franchising can generally offer a number of distinct advantages to individuals who want to start and run their own business including the minimization of risk, comprehensive training & support, marketing assistance, a proven business model, and more.
Overall the advantages of buying a franchise can generally offer an individual a greater chance of becoming a successful small business owner.
Minimize Risk: In my opinion the biggest advantage of buying a franchise business is that it is generally a lot less risky than starting a new business. Most studies conclude that over 90% of new businesses fail within 3 to 5 years.
In comparison, U.S. Dept of Commerce studies have shown that over 92% of franchised businesses are still operating after 5 years. With an established and proven operating system already in place for to follow, franchises can generally offer you a much greater chance of establishing a successful business.
Training Provided: When you buy a franchise opportunity most franchisers will automatically require you to complete a comprehensive training program that can last any where from 1 to 4 weeks or more.
This training is typically held at the franchisers corporate headquarters or at the actual franchise location. You will benefit greatly by being trained to operate your franchise location the same way that all other franchisees were, dramatically reducing the learning curve by directly transferring the knowledge and secrets of running a successful operation.
Franchiser Support: Providing on going support to new and established franchisees is second nature to most franchise companies. Its just common sense that franchisers will want to support you because it is in their best interests for you to succeed for a number of obvious reasons including the chance to generate more royalty fees and expanding their franchising system.
So in general you can always feel comfortable that most franchisers will be available to provide support and answer any questions and concerns you may have about your franchise business.
Marketing Assistance: One of the major advantages of the franchising business model and the system of multiple standardized units that it creates (that generally offer the same products and customer experience) is that it inherently helps market your franchise location with little or no effort.
That is not to say that as a franchisee you should not attempt to do some of your own marketing as well. And if you do, the good news is that many franchisers are often willing and can be very effective in helping you develop marketing plans for your own local market.
A Proven Business Model: Starting a new business model from scratch is inherently risky. When you buy a franchise you are generally buying a proven business model or concept that can be independently validated as having a track record of success.
Unlike most small businesses started from scratch, a franchise business can offer the advantages of established operating systems, services, products, marketing, and brand name recognition that can save you invaluable time and money. And most importantly, these advantages can ultimately increase your chance of becoming a successful small business owner.
(ArticlesBase SC #535965)
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Labels: best franchise business, business franchise, buy a franchise
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Friday, March 12, 2010
Hello World
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Welcome to the Buy A Franchise blog.
Labels: a business selling, automotive franchise, beauty franchise, best franchise, best franchise business, best franchises, business broker, business brokerage, business brokers, business for sale
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