The Challenges Of Buying A Franchise Business Essay

“ Buying a Franchise offers many benefits over get downing a concern on your ain. The franchisees benefit from the preparation and ongoing support that they receive whilst seeking to do their concern successful. Peoples get downing a concern on their ain frequently have no aid or counsel in the twenty-four hours to twenty-four hours running of the concern!

The franchisees receive counsel on location, fixtures and adjustments, selling and operation of the concern theoretical account. This counsel is based on old ages of experience the franchiser has gained non merely from running the concern theoretical account but besides from reding other franchisees.

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Buying a franchise concern is at least a five twelvemonth committedness and as such should non be taken lightly. It is of import to do the right life style pick instead than establishing the determination to purchase strictly on profitableness of the concern theoretical account.

A prospective franchisee should ever look at the market trends to determine whether the demand and demands of the merchandises of the franchise chance are predicted to turn or worsen over the medium and long term. Geting advice from an experient comptroller can assist in this regard.

What makes the franchiser ‘s merchandises better than the competition? Is the franchisor continually puting in bettering the merchandises to reflect alterations in latest tendencies and demands of the clients? Analyzing which merchandises have been changed and new 1s introduced over the last five old ages will assist in this respect.

The district is merely every bit of import as the franchise theoretical account. Not all franchises work in all districts as each country has their demographics and purchasing forms. Decent cognition of the local country is priceless and the pick of which type of franchise concern to purchase should be made with respects to this information.

Making the right pick of franchise that is based on single accomplishments every bit good as the single demands of each peculiar district should function to guarantee that the concern theoretical account works both in the short term and the long term

International Franchising

International franchising refers to a domestic concern ‘s enlargement into foreign states and markets. International franchising is a complex procedure that requires thorough considerations of many factors, such as feasibleness, adaptability, and benefits versus hazards.

Reproduction: During the procedure of international franchising, companies frequently strive to retroflex successful domestic concern theoretical accounts in foreign markets.

Challenge: Differences in linguistic communication, Torahs and fiscal systems, between franchising concern and host foreign market can present serious challenges during international enlargement.

Benefits: International franchising means new markets with new clients and selling potencies. International franchising besides places company ‘s name and presence in a planetary market.

Adaptability: acquisition to accommodate to the demands and demands of a new foreign market can pull local clients and purchasers and take to higher concern success in a new state.

Advocate: International franchising experts help companies understand a foreign market before enlargement. Advisers advise concerns on a figure of topics, from funding to civilization spreads.


– There is a higher likeliness of success since a proven concern expression is in topographic point. The merchandises, services, and concern operations have already been established.

– Bankers normally look at successful franchise ironss as holding a lower hazard of refund default and are more likely to loan money based on that premiss.

– The corporate image and trade name consciousness is already recognized. Consumers are by and large more comfy buying points they are familiar with and working with companies they know and trust.

– Franchise companies normally provide extended preparation and support to their franchisees in attempt to assist them win.

– Many times merchandises and services are advertised at a local and national degree by the chief franchise companies. This pattern helps hike gross revenues for all franchisees, but single franchisees do n’t absorb the cost.


– Franchises can be dearly-won to implement. Besides, many franchises charge ongoing royalties cutting into the net incomes of franchisees.

– Franchisors normally require franchisees to follow their operations manual to a tee in order to guarantee consistence. This limits any creativeness on the portion of the franchisee.

– Franchisees must be really good at following waies in order to keep the image and degree of service already established. If the franchisee is non capable of running a quality concern or does non hold proper support, this could restrict success.

Sometimes franchisors may be lax on their committedness to back up the franchisee. Besides, they may do hapless determinations that would hold an sick consequence on the franchisee. Therefore, it is of import to research any franchise construct exhaustively before subscribing any understandings.

Benefits on International Franchising

Buying a franchise is one manner for an enterpriser to acquire started in concern. Franchises offer a proven concern theoretical account to follow every bit good as support in countries like funding and preparation. International franchises can supply the chance to take advantage of turning planetary markets, although the franchisee will necessitate to get the better of the hurdlings associated with accommodating to the ways of a new state.

Cultural Adaptation

Franchises provide the concern proprietor with a full scope of support services. This proves good when it comes to accommodating to the ways of a foreign state. The company can assist you engage local direction and workers who are familiar with the methods of making concern in the state, which can do the passage much smoother.

Business Expansion

If you already have an established franchise and are looking to spread out, adding units in another state can supply a more profitable option to an already concentrated market. This is peculiarly meaningful if you sell a merchandise or service that is instead common in your place state.

Cornering the Market

You may even be fortunate plenty to open a franchise in a state where there is small competition and there is a great demand for your merchandise or service. This will enable you to corner the market and perchance unfastened several locations, set uping you as the leader in your concern before the inevitable entryway of rivals occur.

Change of Lifestyle

Owning a franchise in another state can ensue in a new and exciting manner of life. Franchisees from a cold clime may enjoy the chance to travel to a warm, cheery venue to open a concern. Some may besides look frontward to spread outing their skylines by sing and absorbing into a new civilization.

Taking Advantage of Growth

If current franchisees are sing slow concern due to the place state ‘s dead economic system, they can seek to open another unit in an country sing strong growing. States and countries exhibiting growing as of 2010 include China, Latin America and the Middle East.

Advantages of international franchising

Franchising is a alone signifier of concern agreement. The original company ( called the franchisor ) enters into a contract with a 2nd concern ( called the franchisee ) in which the original company offers the 2nd concern the right to run under the original concern ‘s name and the right to sell its merchandise. The franchisor normally offers counsel and expertness to the franchisee. All of this is done for a fee, and though holding a franchise is n’t the same as get downing a concern from abrasion, there are a figure of advantages to the system. This is besides true for international franchises.


The major benefit of a franchise is that franchise ‘s repute. If a franchise is good known for offering a certain type of merchandise or service and a new subdivision of that franchise opens up locally, so people know approximately what to anticipate. For international franchises there are some extra issues of repute to see. For case, the state of beginning that the franchise comes from could be viewed as alien, which will convey in extra concern.


Franchises are viewed as a concern program that ‘s already undergone a test by fire and succeeded. By and large talking, this makes them much easier to finance, every bit far as acquiring loans from Bankss is concerned. If a franchise ‘s repute and success can be clearly shown, so the bank knows the franchisee has a much better opportunity of wining than he would if he were seeking to get down up a new and independent concern. This is even truer for companies that are known internationally, which makes Bankss experience even more generous when it comes to helping with concern funding.


Regardless of whether or non the franchisee sets up in the franchise ‘s hometown or on the other side of the universe, an international franchise has the capableness of widening support, advice and preparation to franchisees. The franchise offers developing manuals, entree to provide webs, advice and other signifiers of aid to the franchisees. This is particularly true where an international franchise is concerned, because every franchisee impacts the franchise ‘s repute and range. If all of the franchisees do good, so it will increase the franchise ‘s repute, range and even their trade name acknowledgment.

Franchising primary benefit is risk minimisation. Get downing a new concern is hazardous. Most surveies show that over 90 per centum fail within three old ages. The primary ground that the failure rate is so high is because the proprietors have to travel through the learning curve of operating that specific type concern. Franchising reduces that curve well.

Another ground to purchase a franchise is that a franchise investing can be exhaustively researched before any important outgo is made. Existing franchisees offer a wealth of information about the concern so that new franchisees can seek the concern on before they buy to do certain it ‘s a good tantrum for them.

Franchisers sell a defined, proved concern format or method of operation, offering a merchandise or service that has sold successfully. An independent concern is based on both an unseasoned thought and operation.

The experience of the franchiser ‘s direction squad increases the potency for success. This experience is frequently conveyed through formal direction and on-the-job preparation.

Franchisees can frequently purchase lower-cost goods and supplies through the franchiser, ensuing from the group buying power of all the franchises.

Established franchisers offer national or regional name acknowledgment. While this may non be true with a new franchiser, the benefit of get downing with one is the possible to turn as its concern and name acknowledgment grow.

Franchising provides a unvarying system of operation, so that consumers receive unvarying quality, expeditiously and cost-effectively. A unvarying system brings with it the advantages of mass buying power, trade name designation, and client trueness, capitalising on the proved format.

A franchiser besides provides direction aid, including accounting processs, forces and installation direction. An single with experience in these countries may non be familiar with how to use them in a new concern. The franchiser helps a franchisee overcome this deficiency of experience.

Franchisors help franchisees develop a concern program. Many elements of the program are standard operating processs established by the franchisor. The most hard portion of a new concern is its start-up, since even experienced directors lack the cognition to put up a new concern.

One of the biggest benefits to franchising is marketing. The franchiser can fix and pay for the development of professional advertisement runs. Regional or national selling done by the franchiser benefits all franchisees. In add-on, the franchiser can supply advice about how to develop effectual selling plans for a local country through a concerted selling fund, to which the franchisees contribute a per centum of their gross income.

It ‘s possible to have aid in financing a new franchise through the franchiser, who frequently makes agreements with a loaning establishment to impart money to a franchisee. The franchisee must still accept duty for the loan, but the franchiser ‘s engagement normally increases the likeliness that a loan will be approved.

A franchiser besides provides preparation for the franchisee. This is particularly of import if the construct is complex. The best preparation combines schoolroom or one-on-one preparation at the franchiser ‘s installation with field preparation at the franchisee ‘s topographic point of concern.

Finally, franchising has found a solid economic niche that caters to specialise demands. Many American consumers no longer want a silencer installed by a service station, a beefburger from a diner, a pizza from person who wo n’t present it within 30 proceedingss or their hair cut by a local Barber. Specialists, it seems, “ do it better, ” and the franchise industry is merely excessively willing aid.

Once you become a franchisee and portion of a franchise organisation,

What are your functions and duties?


The first map you have in your new enterprise is as an investor into your concern. You will necessitate to put financially with an initial franchising fee, but besides be prepared to pay any extra costs that might be necessary to acquire the concern up and running such as equipment costs. Besides, there will be ongoing royalty fees that you will necessitate to be cognizant of.


Second, you will necessitate to be certain that you can put an equal sum of clip in the concern. Although the system is fundamentally set up in franchising, you will still necessitate to ab initio pass excess clip larning how the system works. The franchisor normally offers preparation and uninterrupted support, therefore the on-going royalty payments. Like anything else, one time you know the Immigration and Naturalization Services and outs of the system, the clip investing decreases slightly.

Leadership and Partnership

One of the most of import accomplishments you need to possess as a franchisee is the ability to be pro-active and take enterprise. You should be able to easy presume a leading function.

You need to be certain that you understand how the full system plants and non be afraid to inquire the franchisor inquiries. It is particularly of import to pass on with the franchisor anything that you notice that does n’t look right to you.

After all, you are fundamentally presuming a partnership function with the franchisor. Therefore, you should be able to work together, portion thoughts, and decide issues together. You may detect something that the franchisor was non cognizant of since you are much closer to the concern. The franchisor would likely appreciate your conveying concerns or disagreements to the tabular array, particularly if you offer possible solutions.


With all of the duties that the franchisee holds, communicating and organisational accomplishments are cardinal accomplishments to possess as a franchisee.

As mentioned, it is of import to maintain in close communicating with your franchisor. In add-on, you will necessitate to be able to pass on efficaciously with your clients, employees, sellers, and other concern contacts.

Furthermore, it can be rather good to team up with other franchisees on a regular footing. It can assist you run your concern more swimmingly if you portion thoughts and solutions to jobs experienced with others in the same capacity.


In your function as franchisee, you should be prepared to have on many chapeaus. In runing the concern, you will most probably have to pull off all the day-to-day operations involved in runing a concern, including telling supplies, run intoing with clients and sellers, fixing paysheet, deciding disagreements, etc. These are merely a few of your “ sub-roles ” depending on the type of concern you are running. It is indispensable to be able to form all of your duties so that everything gets done accurately and in a timely mode.

In decision, every bit long as you understand your function as a franchisee and do every attempt to transport it out exhaustively, you should be able to pull off a successful franchise. “


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