Certain Considerations – Business Franchise

           

In contrast to starting their own business, people are opting to purchase a business franchise since it is very popular nowadays. There are lots of benefits that these business starters can get by choosing this option but their main basis is that since they are only franchising, it is already understood and proven that the said business is already established, legitimate and has a license.

As a franchisee, you are technically buying the license to use the business’ name, products, services and management support systems of the franchiser company and it just usually covers a certain geographical area and that will only run for a certain period of time. One thing is clear though: Franchisees do not actually legally own the business.

But before you go ahead and take the plunge and decide to purchase your own franchise, there are things that you need to seriously consider.

Different Franchise Forms

A franchise business can take different legal forms - most are sole traders, partnerships or limited companies. Whatever the structure it is, the franchisee's freedom to manage the business is limited by the terms of the franchise agreement.

Is it growing?

Here’s a fact: the Franchise Business sector is still growing rapidly.During 2007 the Nat West Bank carried out a survey into the UK franchise market which revealed the surprising financial growth of this sector. The approximate annual turnover of the franchise business sector is in excess of £10.8 billion. What is more interesting is that the vast majority of Business franchisees are in profit - a total of 93% to be exact! In 1991 the total number of profitable franchisees was 70% and in 2004 it was 88%.The simple reason why this is growing is that a franchise business is usually tested first before it goes to market. If it works in one area, then there is a very strong chance that it will grow in other areas as well.

The right timing

Buying a business franchise’s success and will become more effective with regards to your profit when you do it on the right time.  This is where buying a franchise in ‘key’ areas and in the times when the franchise is generally unfamiliar to the masses.

Do your research

Before you take your money out of your wallet, make sure that you have researched everything thoroughly. Make sure that you can see a return of your investment or ROI. Do not buy a franchise just because you are too excited to start a business. While it is true that having your own business can impress your friends, you have to see the reality that it requires hard work and it is often too difficult to get off the ground.  Remember as well that you do not own the business but you just own the rights to use the brand, products and all which may be frustrating.

So just carefully think it though and give it a go.