Monday, December 17, 2012

All About Franchising

By Donald Heffernan


Non-professional fresh graduates generally always have a difficult time acquiring really good jobs. What's frustrating is that when they do secure a job, they almost always start at a cheap rate. Fortunately, optimistic fresh graduates don't need to settle with this if they don't wish to. You can now be your own boss by choosing to obtain a patent from currently existing companies and launching it in any area you want. The only thing you would need is some capital, which you can always borrow from investment firms or other willing creditors.

Franchising is a business technique where an existing establishment lets interested parties to use their brand name and sell their products. Obviously, you can only get this advantage after you pay a certain price. Simply stated, an interested party may only be a franchisee after paying the franchisor's charge for royalty. The price of this cost depends on the popularity of the franchisor. After settling the fee, the interested party should secure all the permits and legalities required for him to become a franchisee. Only when everything is settled can an interested party be an official franchisee and begin administering the business.

It is more beneficial for striving entrepreneurs to take part in franchising rather than to set up a company of their own because they already have an advantage over their rivals-- a brand name. Individuals trust companies with recognized brand names more readily compared to newly-opened establishments. Another perk of getting a franchise business is that you have better chances of obtaining credits. Lenders are more confident to lend you money because they know that you are using an effective business model and that you have the support of your franchisor. All trainings required are also sponsored by the franchisor, and oftentimes they even help you identify the most suitable venue to put up your outlet. This is much less of a risk than trying to search for a suitable place on your own.

Certainly, there are also downsides in entering a franchise business. To start with, not all the proceeds of the company will go to you. Since the business is not really your own to begin with, you would have to remit some of your profits to the franchisor. Secondly, because you are bounded to the franchisor, they would continue to have some sort of control over how you handle and control the franchise business.

Franchising is one way of starting a company without having to visualize what it would be comprised of. So long as you pay the fees and obtain all legalities, you would be able to enjoy the title, merchandises, and development techniques of a famous company. You have the sensation of being a boss while at the same time also being advised by someone else. A fraction of your revenues would need to be given to the franchisor, but your gross profit could possibly still be more than the profit you would've gained if you started from scratch.




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