Franchising Opportunities

Many companies prefer to infiltrate the market using franchising as an option. For this process to be smooth, the franchise must be carefully chosen. This involves a long procedure that must be studiously followed for the success of a business.

An individual can apply for a franchising opportunity by dropping in an application. A great deal of thought must be put in while applying for this as the application itself can tell the company many aspects of the individual such as the kind of person the individual might be, individual’s interest in this job, future dedication to this job, communication skills, and motivation for applying for this job.

The company checks into the applicant’s background to find out the past experience in communication skills or customer service, or to search for a business oriented background. They must be able to make independent decisions in times of crisis if such a situation arises. This will require the applicant to have some management background and interaction skills. Be it a problem with a customer or problems brewing among employees, the owner must be in a position to deal with them.

The applicant must be financially sound to take care of the fees to be paid for the franchising. These might vary depending on the size of the franchise and the company wishing to open the franchisee. Either way, the applicant must be able to dig up a sufficient amount as and when required. Other than the franchising fee, the applicant must also be able to cover the initial cost of labor, furnishing, advertising, inventory, and promotion and the rent of the place leased for the franchise. Although starting a franchise is comparatively cheaper compared to opening an individual business, it is still an expensive option. When the applicant does not personally have a large amount of money, the company checks if the option of borrowing the amount from friends and relatives is sound.

The applicant must be able to take directions from the company. Even though a franchise is run as an independent business, the company’s rules and regulations and the company's strategies must be followed with no exception. To determine if the applicant can take directions, the best method is to enquire from the previous jobs or businesses where the applicant must have worked. Also, the applicant must be smart enough to make certain decisions when the need arises and the company need not be involved in the same.

The applicant can start a franchise for a company only when the applicant believes in the company’s products and business. The applicant must get to know the business being done by the company along with its operations. This would show the applicant’s interest in the company and the willingness to learn by doing business with the company.

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Franchising Vs The Internet

When considering a path to your financial dreams, it's very rare that one can become financially independent working for anyone else. So, is franchising your answer?

It's a common misperception that owning a franchise is the answer to all our financial dreams. For a select few this may be the case, or may 'have been' the case. Today's franchise environment isn't what it used to be.

For starters, in the old days - at the beginning of the franchise boom, getting a McDonald's franchise was actually within reach for the small, hard working entrepreneur who had the drive and passion to run his own business, but simply need a proven path to follow. Many of those early McDonald's franchisees got wealthy due largely to the appreciation of their real estate assets (that dirt they purchase way back in the beginning turned out to be some of the most valuable in any market) - who knew!

Today, that environment has changed dramatically. Not only are the requirement significantly different, the harsh reality is that "the perception of rewards" is often very different than reality. The American Franchisee Association, a trade association that represents franchisees nationwide, reports that many members are unhappy with the franchises they purchased. Many say they would have made different choices if they'd known before what they learn after getting involved.

But a franchise is supposed to be a perfected business model almost ensuring your success - right? Wrong! Franchises now have a failure rate that exceeds 30%! Franchises also offer poor profitability when you factor what equals 6%-18% of gross sales for royalties and other fees going to the franchisor. Combine that with excessive up front costs (Avg. capital investment exceeds $500k) and a legal notebook full of rules and regulations that must be followed, I ask you seriously is a franchise really something you should even consider?

What about the Internet? How many entrepreneurial businesses, services and ways to earn money online have been created by Google, eBay, Yahoo and the hundreds of other online enterprises?

With the internet, you don't need a significant amount of start-up capital and can be "in business" within a matter of a few hours to a few days. Yes, making money online is more than just having a website. But, I dare you to compare the returns that are possible through a well run internet business as compared to that of a franchise!

More importantly, there are so many ways to earn money online that you don't even have to have your own unique idea, product or service. Simply learning how to market on the internet puts within your reach profits from Affiliate commissions or developing your own direct sales business.

Online marketing isn't for everyone - but neither is a franchise. Today, more than at any time in our history people are in need of earning more income, either part or full time. Today, more than any time in our history the internet is available to a larger percentage of the worlds population making each of them your potential customer.

Still considering a franchise? I encourage you consider online opportunities too. Who knows, you may find yourself in the same position financially as some of those original McDonald's franchisees - laughing all the way to the bank.

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Turning a Small Business Franchise Into Big Business

Often, people looking at purchasing a franchise have their sights and hopes set on wealth and prestige, attaining success with a large business dominant in its market. Of course, that can seem pretty well impossible when what you're starting with is considered a small business. After all, a small business and a big business are by definition two very different things. Still, the ambitious, upwardly mobile entrepreneur needn't fear that beginning with a franchise business considered "small" means that it has to remain that way, because there are ways to turn something small into something big, in fact, there are two primary ways of accomplishing that in the small business world.

1. Start Big

Yes, it seems somewhat like a contradiction in terms to say that a small business can start big, but surprisingly, it's true, and depending on your financial status and business history, it may be the most sensible route to take. Many longtime businessmen agree that if you have the desire and ability to go big at the outset, it will financially profit you in the long run. There are at least two examples of franchises with which this is an option.

Mars Venus Coaching is the first. There are two offers on the table for anyone who wants to initiate a franchise with this organization: starting a single franchise unit or a master franchise. There aren't many businesses that offer the latter, but Mars Venus Coaching does, which makes jumping right into large-scale business possible. As the master franchisee, the business owner is responsible for selling and overseeing single-unit franchises in his territory, ensuring that new Mars Venus Coaching coaches are consistently being added to his area and are successfully finding clients for their business and life coaching services.

Another opportunity to jump right to the top of the food chain and establish yourself as a business power, WSI Internet doesn't offer master franchises like Mars Venus Coaching does, but it does offer an abundance of possible business sizes, ranging from simple, one-man work from home to office-based, multi-employee scenarios. Possibly the best internet marketing franchise out there, WSI Internet is designed to allow the up-and-coming franchisee with an itch to succeed to save time by starting big.

2. Start Small and Grow

Though many do recommend starting out with a large business if that's where you eventually want to get to, not everyone has the financial or temporal resources to dive headlong into the huge business of their dreams. And really, taking that leap into a big operation isn't for everyone anyway, because some people need that extra time to grow into the patterns and practices of a small business before applying the same procedures to a larger business is a good idea. It's kind of like starting with training wheels, not because you expect to use them forever, but because you want to get at least a little stable before riding the "big kids' bike.

Fortunately, there are more business opportunities available to the entrepreneur wanting to grow rather than start large, and a good starting point is the Home Team Inspection Service. As the owner of your very own home inspection franchise with this brand, you are quickly made ready to succeed in the field, given everything from a complete territory analysis to national marketing and call-center backup. Most importantly, you receive one of the best business models in the industry: instead of inspecting a full home single-handedly, Home Team Inspection Service franchisees work in small teams on each inspection. It's a great way to take care of the day-to-day work, and by training new inspectors, right alongside them, you can slowly build a larger and larger team and a larger and larger business until you, one day, can step back and leave inspecting to your teams of employees while you work on further expansion.

Doody Calls is another small home based business that provides plenty of room for growth. Built on the fact that dogs make messes in the yard that owners don't want to clean up, this franchise operation is in the business of scooping poop on designated client routes. As the business begins, it can be nothing more than the franchisee with a truck and a shovel, but from that starting point, the sky is the limit. A franchisee wanting to make a big splash can eventual have fleets of Doody Calls vehicles driving around town scooping pet leftovers for grateful clients who appreciate saving that time.

Though it's a slightly different brand of cleaning, Merry Maids provides the same opportunity for the enterprising entrepreneur. Regardless of whether you begin your work with this renowned company as owner and operator or as the overseer of just a handful of employees, there is always room to expand, take on more employees, and serve more homes with your residential cleaning services. This company has 25 years of experience, getting over 1400 franchises up and running and keeping them so, which means that however big you plan to get, they can help you.

Some businesses, like the work from home business Fresh Coat Painters, even require franchisees to have a mind for management and expansion. The Fresh Coat Painters mantra is "painters paint... we want business owners." So as you build your painting franchise, you can be certain that the franchisor's goal is to help you grow.

What it Comes to

Not everyone wants to keep their business small forever, and if growth is something that you want, know that an initially small size does not limit your potential. Whether you begin with a literal "small business" or choose to dive right into the deep end of the larger franchise pool, your outlook remains just as bright and hopeful, so do what works best for your leadership style and your particular business.

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Franchising Your Business Model

If you are looking to grow your business using the franchising model, then there are certainly lots of issues that you have to consider beforehand. It's also wise to consider consulting with a suitably qualified specialist. Franchising is a model used by many large businesses, including Subway and McDonald's, and has inevitably contributed towards their rapid expansion and global presence.

Doesn't Dilute Equity

When you finance the growth of your business through franchising it allows the existing shareholders to maintain a greater share of equity within the firm. This means that going forward they can run the business in a way that they see fit, and capitalize on opportunities when they arise.

Scale Quicker

Your business should be able to scale much quicker when you opt for the franchising model. Each time you enter into new markets, and sell more franchises, your balance sheet will become stronger through franchising fees. This is in comparison to other businesses, where they will often have to heavily leverage their business or dilute equity to finance this.

Limit Losses

Dependant on the structure of your franchise agreement it is unlikely you will be able to make a gross loss from selling a franchise in any giving trading year. Most franchisees pay a yearly management fee to the franchisor, which is a percentage of revenue. This means even if one particular franchise is not profitable, this will not impact the business as negatively as it otherwise would. This makes the business far more stable with more predictable earnings.

Well Managed

It is likely that each franchise will be well managed when the owner is so closely vested in its success. This allows for your business to worry about micro-managing less, and worry about long-term strategy more. It also means you will most likely have higher caliber management in place than you otherwise would.

Cannibalization Less Problematic

If two McDonald's franchisees open restaurants near each other then it will probably benefit the parent company. Not only do they benefit from the initial fee from both companies, but they also benefit from the increased revenue brought by their wider reach.

Although this may benefit McDonald's in this case, if they owned the stores directly they may find that they were competing against each other for the same business. This means that total revenue would be higher, but profitability would take a hit. With business franchising, your business becomes immune to this.

Encourage Efficiency

Through making the franchisee responsible, as directly as possible, for the costs that they bring to your business it's possible to drive efficiency within your business in a way that would not otherwise be possible. If one franchisee is using up more head office resources than you would like, there expenses can reflect this.

Economies of Scale

Because you will be able to reach critical mass much faster than you otherwise would, it means that expenses can be shared out amongst a larger organization. For example: when the business pays for a new product design everyone benefits. This makes the business more cost efficient.

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