No
matter what job you have, there are probably days
when you've just had it with excessive demands
on your time, conflicts with coworkers or company
policies, and pay raises that barely keep up with
inflation. At that point, you may start thinking
about being your own boss-realizing the American
dream of owning your own business.
You
may have thought about buying a franchise. In
this business arrangement, a franchisor
(the parent company) sells the franchisee
(you) the right to sell its goods or services
in exchange for a franchise fee. It might seem
like just what you need to make a big change in
your career and your life. After all, everyone
already knows about Meineke Muffler, Subway, Dunkin'
Donuts, Stanley Steemer, and hundreds of other
businesses that have made the roads going through
most of America's towns and cities look pretty
much alike these days. As a franchisee, you'd
have the advantage of being able to use the company's
name, recognizable storefront, and trade secrets.
And you've heard that franchise fees for some
businesses run as low as $10,000.
But
do you really know what's involved in a franchise
agreement and in running a franchised business?
There is much more to it than paying the franchise
fee and opening the doors. While fees may seem
fairly reasonable (the majority are under $40,000),
that's only the beginning. You will need an upfront
investment that amounts to much more than the
franchise fee. For example, survey results in
the article "Annual Franchising Industry
Overview" ( Bond's Franchise Guides)
showed an average of $27,300 for a motel franchise-but
estimated start-up capital or line of credit was
$6,600,000. Even a smaller-scale business category-say,
a shop that sells donuts, cookies, or bagels-carries
an average franchise fee of $24,676 with estimated
startup capital at $261,165. In addition, most
franchisors have requirements for your personal
net worth.
Owning
a franchise is not easy, and anyone who goes into
one believing that the business will run itself
is destined for failure. It carries a lot of responsibilities.
In fact, you may feel that you're still working
for someone else once you learn about the restrictions,
requirements, and specifications that will be
imposed on you by the franchisor. You will need
to unerringly follow their practices and meet
their standards, and you will sign a contract
that says so.
The
contract will also spell out what happens if you
want out or can't make a go of the business. Some
franchisors specify in their contracts that even
if you are running the business as a corporation,
you and your spouse can be sued as individuals.
You'll want to hire an attorney to carefully check
the whole contract over before you sign anything.
You'll also need an attorney to help you obtain
the business licenses you will need. If you will
be selling food to the public, you'll need a license
from the health department, and you will also
need to always be ready for surprise inspections.
But
let's say you've got enough saved for the fee,
you've got a more-than solvent net worth, you
feel capable of understanding and taking care
of all the details, and you can borrow the rest
of the money you need. What could go wrong?
It sounds like a sweet deal, doesn't it?
That
depends...
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Do you have enough money to run the business
until it starts turning a profit? This means
you will have to pay employees, pay for
product, make payments on your business
loan, and send the franchisor a monthly
royalty of 4%-8% of total sales (not of
profit), depending on your contract. Other
initial and ongoing costs include insurance,
employee training, inventory, equipment,
rent, maintenance of the site, and your
share of advertising expenses.
Was the franchisor's projection of your
earnings overly optimistic?
Is your family behind you-even willing to
work with you? Does everyone realize that
you will be working hard at the business
location for all the hours it is open every
day, and that you will be the first one
there in the morning and the last one to
leave at night? do they realize that vacations
are pretty much out of the question for
a long time now, and that even if you manage
a weekend getaway, you're always "on
call"?
How well do you interact with people? You
will be dealing with employees (some of
them unreliable), customers (some with complaints),
and your contact people at the parent company-in
effect, your new bosses.
If things get crazy, can you keep your cool?
Did you choose a business that you actually
enjoy and find exciting? Or did you just
buy yourself a job that has got you trapped
even worse than the one you left behind?
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An
Alternative Plan
There is a much less complicated way to achieve
financial independence and success without jumping
on a franchise rollercoaster that never stops.
We offer a viable, legitimate way to earn an exceptional
income without the huge investment, the loss of
freedom, or the sacrifice of time with your family.
As a home-based business owner, you'll work in
the peace, quiet, and comfort of your own home.
You'll set your own hours. You won't have employees
that drive you crazy. Instead, you'll work with
a support team that will mentor you in a professional,
respectful manner.
You can
ditch that going-nowhere job and be your own boos-without
the hassle of a traditional business. For free,
no-obligation information, simply fill out the
web form below.