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According to the Journal of Franchise there are some very general personality and work-life characteristics that may help you identify if franchising is the right
option for you and your second income:
| Entrepreneurs |
Franchisees |
| Very courageous |
More cautious |
| Highly independent |
More open to guidance |
| Visionary |
More methodical |
| Accepts higher risks |
Conservative about risk |
| Somewhat of a loner |
Prefers a partnership approach |
One of the most important steps in your journey to a second income is to determine if you have the best fit with respect to the type of business that you wish to
start. Consider your passions, interests, experience, and values.
There are three basic franchise categories: Product; Service; Business Service.
Why Franchises Work
So, you have decided to buy a franchise. Will it bring you a good return?
The bottom line is that if a franchise is growing, chances are your decision to buy into it is already a sound investment because, as the franchise grows, brand
recognition grows along with the potential budget for further promotional efforts, which in turn leads to increased sales and so on.
With a larger number of unit orders and associated sales, economies of scale are reached with respect to production and distribution. This, in turn, leads to
reduced costs and the potential for higher profits.
A recent poll of franchisees found that:
- 94% considered themselves successful;
- 75% would by their franchise again;
- The average pre-tax income of those surveyed was $124,290 USD.
The downside of choosing to run a franchise business over a non-franchise business is that you will have limited freedom to
run the business that way you want to. You will be bound to replicating the business practices that the franchisor has developed, and will be obligated to
participate in promotions and other sales-related campaigns as per the company's specifications. If you would find it difficult to follow the leader in all aspects
of running your business, then a franchise, no matter how profitable, would not be a good fit. If you are not happy, your employees and your customers will inevitably
feel in - and so will your bottom line.
Buying a known product or service that is already well recognized and well-received from a company that has a sound financial position, good support systems,
and a reputation for fostering positive investor and client relations is a strong business case for why franchising continues to grow as a business model.
(Source: http://www.frannet.com/opencms/opencms/franchising101/Why_Buy_A_Franchisex.html)
Getting Help
If you are new to franchising, it may be wise to seek out a franchise expert to assist you in the selection process and in the start-up phase.
See our Franchise Professionals for a list of those who can help you.
Frannet, The Franchise Network, is an organization of over 80 independent franchise consultants with offices in the USA, Canada, Mexico, Australia, Germany, Singapore
and Russia. Experts in franchising from Frannet will meet with you to discuss your goals, expectations, and all other factors that will impact your decision to go
into franchising as well as what particular franchise you might choose. Further, the consultant will assist you in the due diligence process and coach you through
the crucial start-up phase of your business.
Because franchising involves a lot of cooperation and communication with the franchisor, it is imperative that you put a lot of time into researching the company
you are considering. Your Frannet advisor can help you with knowing what exactly to look for, and may even have had direct experience with that particular franchise.
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