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Franchise

Today’s Opportunities In Franchising

Want to own a business with an established brand and business model? If so, franchising might be the right option for you.

  • Franchising is when a company sells the rights to its existing business model and products.
  • Opening a franchise is a business venture with relatively low risk and high support, but you must be aware of the regulations and factors that make a franchise successful.
  • While costs vary widely, in general, you can expect to spend $50,000 to $200,000 in franchising startup costs.
  • This article is for entrepreneurs and business owners interested in buying and operating a franchise.

When entrepreneurs dream about their future, franchising is rarely part of the fantasy. While it may not be your first choice, buying a business franchise comes with many benefits. When you open a franchise, you get a chance to run your own business while buying an established brand and business model.

“A franchise is a business with training wheels,” said Tom Scarda, founder of The Franchise Academy, a podcast dedicated to franchising. “For a majority of franchisees, franchising has proven to be a viable way to become a business owner.”

Franchises offer a unique mix of low risk and high reward. “For the most part, [franchising] offers the lowest risks and the highest level of support,” Scarda said. “Because a franchiser doesn’t succeed until the franchisees do, you’ll find a team of dedicated professionals willing and able to help you every step of the way, from site selection to employee hiring to grand opening.”

We’ll explore the basics of franchising, factors to consider when choosing a franchise, startup costs and more.

What is franchising?

A company that sells the rights to its existing business model and products to another businessperson or company is creating a franchise. However, the exact definition varies because of the numerous statutes passed by the Federal Trade Commission (FTC) and individual states.

The bottom line is when you buy a franchise, you’re purchasing an established business and a ready-made product or service. Franchises usually come with a recognizable brand name, a proven business model and a repeatable marketing strategy.

Franchise costs

The costs of buying a franchise can vary greatly depending on the type of business you’re considering. But in general, you can expect to spend between $50,000 and $200,000 in startup costs.

Here are some of the startup costs involved in buying a franchise:

  • Initial franchise fee
  • Corporate fees
  • Financing application fee
  • Attorneys’ fees (for having a lawyer review the contract)
  • Accounting fees
  • Insurance
  • Permits and taxes

You’ll also have to consider the ongoing costs of running the franchise. This includes marketing and advertising, running payroll, inventory, and equipment.

Franchise regulations

Federal regulations exist to protect the rights of both the franchisee and the franchiser. The FTC helps oversee and enforce franchise laws to ensure that entrepreneurs receive full disclosure on the state of the business they’re joining and that the franchiser’s brand is protected.

Early in the franchise purchasing process, franchisers must provide a franchise disclosure document (FDD) to the potential franchisee. Sometimes called an offering circular, the FDD outlines the franchiser company’s fees, investments, and bankruptcy and litigation history.

There are also registration and relationship laws that govern the franchise’s registration, salespeople and advertising. More laws cover terminating a franchise, notice and cure periods, grounds for nonrenewal, and equal treatment. These laws and regulations vary by state.

What to look for when choosing a franchise

When it comes to choosing a franchise, thousands of options are available. So if you don’t know the type of franchise you’re looking for, this can be a daunting task. Let’s look at a few factors you should consider when choosing a franchise.

Startup costs

Franchising provides many benefits to aspiring entrepreneurs, but it also comes with significant startup costs. You’ll have to pay an initial franchising fee before you can begin setting up your business and selling products under the franchise’s brand name.

Before launching the business, you’ll be expected to propose a store location, business model, business opportunities and royalties. Once franchise contract terms are agreed upon, you can begin setting up the storefront. All those activities require an additional investment of money and time.

Your level of business autonomy

While franchising’s appeal is getting an established name and branding, running a franchise may limit your business autonomy. You may not have the autonomy to move and grow your business in different directions to take advantage of local business factors. You should think carefully about how much control you want to have over the business before investing.

A sustainable business model

It’s important to find a business with a sustainable business model and a track record of success. Make sure to research where the company stands before joining as a franchisee.

Rob Holt, founder of Two Maids & A Mop, said his franchise underwent growing pains when initially transitioning from a traditional corporation to a franchise.

“In 2013, we only opened one franchise,” he said. “In 2014, we opened one as well. We didn’t really start growing until 2015, but during those first two years of franchising, even though we only had two, we really tried to perfect what we were doing.”

How established the business is

It’s essential to understand the parent company’s current state, including its business valuation. The first franchisees for Two Maids & A Mop were willing to remain patient as the company experienced growing pains, while today’s Two Maids & A Mop franchisees are joining a more established business.

Neither option is right or wrong, but it’s important to know which situation you’re getting yourself into before spending the time and money to open a franchise.

Competition

You should also consider how competitive the franchise’s market is. Competition isn’t necessarily a bad thing, because it means there’s a demand for that product or service. But a lot of competition means you’re going to have to work even harder to differentiate your business and help it stand out.

Company culture

It’s important to consider the prospective franchise’s company culture. The parent company’s management will have a major impact on how you run your business – and your income. In many ways, they’ll be your business partners for the duration of your franchise ownership.

Pay attention to your interactions with company management and the level of support they provide. Do they answer any questions you have and provide resources to help you get up and running?

You should be very wary of buying into a franchise if you don’t like the company management. Look for a company you believe in and can get behind, or move on to a different franchise opportunity.

Your level of interest

Finally, you should consider your level of personal interest in the business model. Look for a business model you find interesting and a product line that excites you.

It’s all right if it’s a new industry or a product you’re unfamiliar with, as long as you’re interested in learning more about the company. Don’t just buy into a business model because you think it will make a lot of money. The energy and effort you put into the business will determine its success or failure.

Benefits of franchising

One of the biggest benefits of franchising is drawing off the experience and expertise of the entire organization. By joining an established brand, you bypass many of the hardships in building a company from the ground up.

“Franchising takes the guesswork out of starting a business,” said Jonathan Barnett, founder and CEO of Oxi Fresh Carpet Cleaning. “They have established systems designed to give new franchisees a massive head start over competitors.”

Being part of a respected brand is invaluable, Barnett said. “It’s hard to overstate the advantage of starting a business and having people know and trust your brand from day one.”

These are some other reasons to consider franchising:

  • Perks of the particular brand (e.g., training and discounts)
  • Business model with a track record of success
  • Easier access to money and small business loans
  • Low risk for banking institutions

Opportunities to watch

Nearly every industry has a successful business practice being sold as a franchise, from retail stores to employment services. Finding the right opportunity for you depends mainly on your previous expertise and passion.

Based on our research of top franchising opportunity lists from around the web, we’ve identified 10 industries where franchise business is booming.

  1. Children’s enrichment: Parents want the best for their children, and educational franchises such as Kumon, The Goddard School and The Little Gym are helping the next generation learn and grow. Primrose Schools is another great option because it offers year-round educational programs and educational child care.
  2. Hair salons: Hair care for men, women and children is a consistently in-demand service. Companies such as Supercuts, Sport Clips and Great Clips allow franchisees to stand out with a recognized brand name, while kids-only concepts like Snip-its allow owners to narrow their target market.
  3. Fitness: For a while, it looked like COVID-19 and the explosion of home workout options might be the nail in the coffin for gyms. That doesn’t appear to be the case. Many Americans are returning to gyms for both fitness and social interaction. If you’re looking for fitness franchises to invest in, Anytime Fitness, Planet Fitness and Orangetheory Fitness are great options. Each of these gyms comes with strong brand recognition, and Anytime Fitness has low monthly operating costs.
  4. Paint-and-sip studios: This entertaining concept, which allows participants to have a glass of wine while taking a group painting class, is growing fast for both new and established companies, such as Painting with a Twist, Pinot’s Palette, Paint Nite, and Wine & Design.
  5. Pizza: This is a staple of the franchise world, with competitors still finding new and innovative ways to put together a pie or slice. Domino’s, Pizza Hut and Papa John’s still rule the market, but concept franchises like Kono Pizza offer a fresh take on this classic food.
  6. Commercial cleaning services: Buying a commercial cleaning service is an excellent option for first-time business owners. Commercial cleaning services work with schools, businesses, churches, medical facilities and more. Jan-Pro is an excellent option to consider if you want to go in this direction, while Merry Maids is a good option if you’re more interested in home cleaning services.
  7. Property management: Since 2008, the number of rental properties – and companies needed to manage them, like Real Property Management and Property Management Pros – has increased, prompting growth and opportunity for those looking to fill that need.
  8. Senior care: As more aging baby boomers require in-home or facility care, this field is evolving by offering services such as advocacy and placement. Franchise options include Caring Senior Service and BrightStar Care.
  9. Spa and beauty services: Franchises such as Massage Envy, Hand & Stone, and European Wax Center are a part of the burgeoning self-care market. You can offer specialized treatments like waxing or massages, or go for a full-service establishment with add-on services such as facials and threading.
  10. Vending machines: Vending machines have been popular for decades, but the success of these models – and the variety of potential product offerings – has made franchising a viable option within the past few years, through companies such as Fresh Healthy Vending and Healthier 4U Vending.

The Basics of Franchising and Today’s Top Opportunities [Business Daily News]

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Franchise

Perks of Running a Food Franchise

Consider these perks to see how buying into a food business can enhance your lifestyle as well as your bank balance.

There are lots of advantages to running a food franchise. Low investment costs, buying into an already established brand, being your own boss, and bringing in an extra income are just some of the significant benefits.

Flexibility and a sociable, stable career mean that investing in a food franchise is a holistic approach to earning a living.

When we think of “perks” we might think of things we’ll get for free. And that is true. But when we talk about the perks of investing in food franchises, certainly the best things in life are free, but they are also ones that will enrich your lifestyle and wellbeing.

Beyond being able to tuck into your tasty leftovers, here are just some of the perks to running your own food firm through a franchise.

Pick the trend that suits your tastes

There’s a street food surge underway just now as the Covid-19 pandemic changed the way in which we satisfy our hankering for food on the go.

Ready-to-eat foods are booming. Fast food is one of the world’s fastest-growing industries and will be worth an estimated $931.7 billion by 2027.

And it’s not just picking up a bowl of noodles on the lunch break. Catering trends have also changed enormously during periods of lockdown and social distancing.

Take for example that street food and food vending are predicted to be one of the trends for wedding catering. The big day is moving away from the traditional sitdown meal or buffet. In the post-pandemic world, guests are wary of sharing a bowl of veg or queuing for vol-au-vents that have previously been examined by numerous people. That means interactive food stations and late-night street food vans are ‘in’. Invest now in the foodie trends that are set to soar.

Starting out small is a big way forward

Franchising enables you to start out small. That way you can test out ideas and find out for yourself just what works for the areas in which you plan to operate and target for the future. It also means you can build towards your own dream rather than that of others. This brings increased satisfaction driven in your chosen direction.

As initial investments are low with franchising, that restaurant concept you have in mind, or the gap in the local market you have identified, means you can trial different cuisines and speciality dishes. This comes with a lower risk than other business models and you’ll always be backed by an established support team and brand.

Fit your franchise to your own wellbeing

Many of us simply don’t enjoy the work we do. Being able to do a job you love can sometimes seem an unattainable dream. When you are the boss, you can fit the daily demands of running a business around your own needs and that of your family.

Instead of corporate dictates, investing in a franchise brings flexibility that you can build into your life. Career satisfaction and emotional wellbeing are things that no corporate salary automatically brings.

When you own a franchise, you won’t always need to be present within the business itself. You can work remotely, work from home, or work on the go – just as it suits you. You can buy into a business that is close to home and ditch that long daily commute for good.

If you’re a motivated and talented individual, there’s every likelihood you don’t like being told what to do every minute of the day. By investing in a franchise you will have the freedom to express yourself.

Share the perks

As your business grows you will be employing staff and you can manage them in the way that you would always have wanted to be managed yourself. You can be creative and encourage creativity in others. That’s incredibly rewarding.

Engaged employees are satisfied employees. You can involve your staff in the company and tap into their own ideas for growth. Not only will that bring benefits to the business but it will foster innovation within the workforce and ensure employees feel a part of achieving your goals.

You can opt into an employee reward programme as you see fit and share the perks of working for you with everyone else. There are lots of third party staff engagement and reward schemes out there these days that offer everything from loyalty bonuses to discounts to tangible monetary benefits. That way you can build motivation and recognition into the ethos of your company.

If you’re operating a food business, then one of the great ways to spread the word is to offer staff discounts and widen this to their friends and family. That way, more people get to taste your great offerings and share their experiences with people they know by word of mouth and social media.

Choose the perks that suit you

Investing in, and operating, a franchise is of course hard work. But if you’re already considering buying into a food franchise you will already know that. In fact, it will be a motivation in itself.

Buying into a food franchise or a takeaway franchise allows you to invest yourself in exactly the catering market that means something to you. You will receive all the support, materials and resources you need. Allow that to be the core ingredient upon which you flourish and bring your own flair.

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Franchise

What to consider before buying a gym franchise

The fitness industry is booming, thanks in part to the impressive variety of exercises and workout experiences available to consumers, and to the prevalence of fitness tracking tools that help users keep up-to-date on their progression towards optimal fitness. With so much happening in this industry, it’s understandable that budding entrepreneurs might consider investing in a fitness brand.

One way of investing in a fitness brand is by buying a gym franchise, thereby positioning oneself as a business leader and becoming a representative of an established enterprise. There are, however, numerous aspects of this endeavour that you must consider before you embark on it. Multinational fitness brand F45 Training has collaborated here to tell you what to think about before buying a gym franchise.

Costs

Fortunately, buying a franchise is not as costly or precarious as starting up your own business. The necessary infrastructure and equipment is already in place, and you’ll already have a substantial customer base. That being said, taking ownership of a franchise will involve quite a bit of expenditure on your part.

First there is the upfront fee, which essentially gives you the key to the franchise and officially makes you part of the enterprise. This fee is usually a hefty one, and paying it might require you to take out a loan. After assuming ownership of your franchise, there are other fees to consider, such as royalty fees, which you pay to your franchisor on a monthly basis in order to maintain your ownership.

The business model

You might see owning a gym franchise as a means of taking control and exercising your own influence over how that franchise is run, whereas the truth is that your franchise, along with all the gym franchises owned by the brand, is run according to a set business model. This business model dictates how every aspect of your franchise will operate, from services rendered to administrative processes. The reason business models are so important is that they ensure each and every franchise lives up to the brand’s image and the customer’s expectations. If one particular franchise doesn’t live up to those expectations, then the brand might be seen as unreliable.

In fact, a solid business model is often the reason why franchise operations are so successful. If a brand has expanded and now comprises a substantial number of franchises, then clearly the business model is concise enough to be replicated in different locations and is easy enough to teach to new franchisees and franchise employees.

Research

If you’ve got your eye on a specific franchise operation, then do your research before making any steps towards purchasing. There are numerous means of gathering information on your chosen brand. Your first step should be to talk to some of the brand’s current franchisees. Find out about their experiences working for the brand and for the franchisor. You might be able to gauge whether or not it’s the right fit for you. You could even go a step further and job-shadow a franchisee in order to gain a better idea of what the job entails.

You can also learn a lot about a franchise by having a look at the Franchise Disclosure Document (FDD). Writing for Forbes, Chris Myers notes that “every franchisor [must] develop a Franchise Disclosure Document…and provide it to every potential franchise buyer,” and that “the FDD exists for two reasons: to protect you as a candidate and to protect the franchisor against allegations of misleading claims.” The FDD will tell you, among other things, about the history of the franchisor, the economic performance of the franchise operation, and the nature of your role as franchisee, ie. what’s expected of you. It can also detail the kind of support you’d get as a franchise owner.

Taking ownership of a gym franchise is a brave step into the business world, but it mustn’t be taken with too much haste. First make sure your financial situation is stable enough, consider the fact that you’ll be acclimatised to a specific business model, and do as much research as you possibly can. When you feel that you’re ready to become a franchise owner, take the leap.

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Franchise

These Signs Will Tell You It is Time to Try Franchising

Franchising could be the perfect way to start a business instead of starting from scratch. When you take on a franchise, you are getting everything that you need plus the name of the brand. You will continue what they already started and also find a way to grow the business. You might be a bit hesitant though given the franchise fees. If you see the following signs, you need to grab the chance despite the cost.

Industry growth 

If you are contemplating buying a franchise in a growing industry, you will be on the right track. You want to invest in a business that has a bright future. You need to analyse the behaviour of the market and see if the industry is on an upward trajectory.

Support from the franchisor 

Before you purchase a franchise, you need to know first if your franchisor will support you. You might need to ask questions, follow up through emails, and have a personal conversation with the franchisor. If they will provide you with all these things from the start without any problem, it is a good sign. For some franchises, even just setting up a meeting with the franchisor can be a challenge.

Great management 

The number of years in the industry will tell you if there is good management behind the franchise. It wouldn’t have lasted that long if it had not had good management. You need to see if the leadership team is sturdy enough to lead the company in the right direction. As a franchisee, you will still heavily rely on the parent company.

Strong advertising 

You might be planning to be a franchisee, but you are still a customer for now. You should know if the company is doing well with advertising. If it is, you can count on the franchisor to support you in advertising the business. The good thing about franchises is that you get support for advertising and you don’t need to spend a lot of money on it.

Satisfied franchisees 

You can speak with other franchisees and find out what they feel about the franchise. If they give positive feedback, you can pursue the plan. Otherwise, you need to think twice. These people have experienced how it is to work with the franchisor. If you do not get enough positive feedback, you might have a hard time if you decide to pursue being a franchisee.

Good potential earnings 

You want to make money out of the franchise. You are willing to invest a considerable sum of money for the franchise fees, but you also need a return for your investment. If the other franchises are doing well, it shows that your business could also do well if you give it a try. Some of the financial records are available publicly, so you can check them out.

After considering all these points, you will be ready to decide to buy a franchise, or not. If all the signs are positive, you might feel that you will be in good hands and the endeavour will most likely end well. It is still possible that things don’t go your way, but at least you will have minimised the risk.

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Franchise

5 Businesses You Should Consider Franchising With

Article Contributed by Lee Flynn

If you have some money to invest and are looking to make more, then you should consider the benefits of franchising a business. When you make the decision to go with a franchise rather than starting your own brand, there are many benefits you will enjoy. You get to capitalize on the name recognition of an established brand. You will also get a lot of support from the parent corporation to ensure you succeed. There are loads of great franchise opportunities waiting out there. Here are five types of franchises you should consider.

  1. Food Franchises

The most popular type of franchise is the food franchise. Food-related franchises carry a huge brand recognition that helps to ensure success. Everyone has to eat, which means that you will always have a huge customer base. When you are choosing a food franchise, you should go with a brand that you feel passionate about. Your passion will help to fuel your success. One thing that can be frustrating about running a food franchise is that it is hard to find workers who will stick around as the employee turnover in the industry is very high.

  1. Retail Franchises

Another popular type of franchise is the retail franchise. This is a good type of franchise for people who want their customers to come to them. You never have to worry about going out to find customers when you run a retail franchise. They will come to your store when they need to buy things. The key to succeeding with a retail franchise is to get a great location. If you are somewhere with lots of traffic, then you can expect people to come through your doors.

  1. Senior Care

The baby boomers are retiring in droves these days, and that means that any business that can cater to seniors will have every opportunity to thrive. As the years go by, there will be more seniors in the country. By 2030, one-fifth of the population of the nation will be over the age of 65. This means that there will be a lot of business available for people who open senior care companies. Opening up a senior care franchise is something that you can feel great about. With a senior care franchise, you will be going into seniors’ homes to take care of them and help them accomplish their daily tasks. This keeps them out of nursing homes, which is something many seniors are desperate to avoid.

  1. Home Services

These days, people are busier than ever before, and there never seems to be enough hours in the day for them to get everything done. This means that most people are looking for ways to save time wherever they can. You can capitalize on this fact by opening a franchise that comes to people’s homes to provide them services. Some great examples are carpet cleaner companies, cabinet painting companies and house cleaning companies. Any franchise you can open that caters to making homeowners’ lives easier has a great chance of succeeding.

  1. Fitness Franchises

There is an obesity crisis in the country. In more than half the states in the nation, at least 30 percent of the adults are obese. All of these obese people offer a great opportunity for anyone who opens a fitness franchise. It is a good idea to open a fitness company that caters to people who are overweight. Franchises that make people who are out-of-shape feel welcome and comfortable from the moment they come in the door will do very good business.

There are so many exciting franchise opportunities out there. Everyone can find some type of franchise that will get them excited. That is the key to success when you select a franchise. Find one that gets you excited. When you are excited about your franchise, that excitement will permeate through every facet of your organization. Employees and customers will be drawn to your franchise when they feel your passion.