Franchise

What is a franchise business?

Franchise business is a method a company uses to distribute its products or services through retail outlets owned by independent, third party operators. The independent operator does business using the marketing methods, trademarked goods and services and the "goodwill" and name recognition developed by the company. In exchange, the independent operator pays an initial fee and royalties to the owner of the franchise.

Why Franchise?

Franchising' primary purpose is risk minimization. Numerous studies have shown the success rate of new (non-franchise) business startups concludes the same. Starting up a new business is very risky and show that over 90% fail within three years. A recent Gallup Poll of franchisees found that over 94% considered themselves successful and that over 75% would buy their franchise again if they had it to do over.

Another reason why it is prudent to buy a franchise is that a franchise investment can be thoroughly researched before any significant expenditures are made. With a new business startup (non-franchise) you are always operating in the dark. No matter how much research you do it is very difficult to get a handle on so many aspects of the new business. With a franchise the franchiser is a wealth of information about the business from how to prepare a pro forma to the best personality traits for the business. But the most important information comes from the existing franchisees.

What is a franchise consultant? Why would someone seek the services of a franchise consultant?

A potential business owner that has an interest in purchasing and running a franchise would benefit from the services of a franchise consultant. There are many franchise opportunities to choose from. A franchise consultant can provide expertise and guidance throughout the entire process. Listed below are many of the numerous reasons that it is advantageous to use this service.

- The service is personal and confidential.

- The service is free to the franchisee, with the franchisor covering the consulting fees.

- The consultant guides the potential franchisee through the entire process of deciding whether to become a franchisee, and how to go about it.

- The consultant helps to verify each company's success and track record.

- The potential business owner saves time and money by having the experts perform research on various opportunities.

- The consultant acts as the one-stop shop, answering questions and referring the potential owner to other resources as necessary, such as financial or legal advisors.

- The consultant works with all types of franchises, including full-time, part-time, new units, and re-sale franchises.

- Consultants are fully trained by their company and work similar to independent real estate agents, providing a full service package.

- Complications and confusion are virtually eliminated by having an expert perform these services.

Overall, a franchise consultant will help you determine if franchising is right for you and if so, what type of franchise opportunities you are most likely to succeed in. Franchise-Guide.org and FranchiseBuyersNetwork.com are 2 websites I have found that offer a free and great franchise consultation service.