deciding to start a franchise, there are a number of aspects that need
to be taken into consideration.
||It is recommended that you first
research what owning a franchise involves before actually contacting
the franchise company.
are lots of hidden rules and regulations involved that it may not even
be worth it in the first place. If you are determined in wanting to
purchase a franchise of a company name then there are definitely some
issues that must be cleared with the company before you sign into any
sort of agreement.
signing into a contract with a company for a franchise one of the
things you may be required to agree upon is exactly how long that
contract will be and how long subsequent contracts will also be. Most
companies require that a franchise owner sign a contract for at least
10-15 year agreement, but then make subsequent contracts half of the
duration that the first one is signed for. You may also want to know
what exactly will happen if you somehow breach the contract and
bankrupt the franchise before the contract is up. It is better to ask
questions now as you will be able to access the risk and damages if
things go wrong. There may be hefty fines and fees involved, but
getting all of the specifics in writing is the best route any franchise
owner can take.
question on your mind should be the start up fees and the costs
involved. Most franchises require that a franchise owner pay an initial
fee to be able use the company's name and reputation, but there are
also some other fees that they must pay as well. For example, what is
usually required is the franchise owners must pay a percentage of their
profit to the company itself in return for being a franchise. Even
though this percentage may only be 1-2%, it still could take a big
chunk out of the profits. It is important to get the exact percentage
or amount that has to be paid in writing, whether it’s a percentage of
the gross or net profits, and whether or not any fees will be required
the first year considering that many businesses do not even turn a
profit until the second or third year.
important issue with franchises and all company branches is the
location of each one. The location of your franchise is one of the most
important aspects. Many companies have stipulations that are set so
that no company branch can be in the way, or in a physical location
that is close to another of the same branch. This rule helps to avoid
saturation of an area and it also promotes fair competition.
these few aspects are only a few important aspects there are other
requirements that you must discuss with the company headquarters itself
before deciding to start a franchise or sign the contracts. Securing
your franchise is very important and making sure you know all the rules
and regulations that are set by the franchise company.