According to official sources in 70 countries the franchise is one of the most popular forms of business. For example, in the US more than a third of all retail sales - a franchise, and in Australia this setting is almost 90%, and these figures include the service sector, fast food, etc. Russia is no exception: the most popular destinations in our franchise: filling complexes, health clubs, fast-food industry and sale of clothing. These are followed by areas such as construction, advertising and accounting services. How to determine whether the franchise will be profitable, and what to look for when buying?
The franchise is profitable, and therefore popular. Initially, the entrepreneur does not bear all the responsibility alone, which gives businesses the stability, more likely to be profitable and survive in the competition. According to statistics, only 10% of the companies working on the franchise out of business in 10 years, while other forms of business are closed in 23 cases out of 100.
Is it profitable to work for the franchise, and how to choose the most profitable franchise
If we compare the history of business success, it turns out that the "independent" entrepreneurs are more likely to go bankrupt than those who prefer the franchise. So, from the "singles" who have decided to implement their projects, ideas and dreams, until the end of the year "living out" at least 50%, and the fifth anniversary is celebrated not more than 20%. In other words, the business world can not tolerate amateurs and do not forgive mistakes. The atmosphere is tough competition and a constant struggle for the consumer. Those who survive and achieves good results, as a rule, opened his own business, when he was professional and they have had business experience or a thorough knowledge of the scope of its future activities. And all of these conditions are not a guarantee of success - it is only the beginning of the mandatory requirements for self-employment.
A more positive things when you open a small business franchise.Almost everyone who ventured into franchising, is continuing its work within a year after the opening, and close the case only 5%, which is almost 10 times less than that of predprinimateley- "loners." It is this huge difference between the bankruptcies of two ways of doing business, minimizing risks, as well as a high percentage of "long-lived" in the franchise make this category of popular and in demand.
The stability or dependence?
However, here too there are many pitfalls. If you look at the statistics after the ruin of the young companies, the first year of "single" is much more than a franchise, but after a longer period of time (4-5 years), the gap is reduced by almost 1.5 times. The fact that independent businesspeople, breaking the mark of 5 years, becomes a mother entrepreneurs and they have a stability and sustainability in the market. At the same franchise, there are two risks: high competition and dependence on other franchises, which could lead to a "domino effect", when the fall of the main knuckles leads to the collapse of all the others. That is, buying a franchise, you are directly dependent on the parent company, as well as the success and viability of its other "daughters." On the one hand, this is a great rear, and on the other, a risky dependence on the whole "family", so before buying a franchise, it is necessary to choose the right.
Choice and competition
Among bankrupt many of those who suffered from incompetence or misconduct of its franchisees. The fact is that because of the growing popularity and demand among investors in the market in recent times they sell many, including the young companies that still do not have sufficient experience and weighing on the market and, accordingly, are not able to organize decent support to his followers. Therefore, before purchasing a franchise, you must first ensure adequate competence and successful experience of the vendor.
As for the risk of competition, everything is simple. Any vendor who tightened their "daughters" in zones of increased competition and risks, such as reduced demand for the segment, monopolization, etc. So before you buy a franchise you need to carefully examine the segment of its activities. Especially if you plan to act as a franchisee.
Still, these risks can not be compared in terms of risks of individual business, so if you do not have sufficient experience and knowledge, it is better to make the choice in favor of the franchise.
What to look for when buying a franchise
The company-franchisor
In fact, buying a franchise - the acquisition on certain conditions, the right to sell the brand, brand, services and / or technologies at their respective owners. Therefore, the first thing you should pay attention - this is a company in which you are going to buy a franchise. You can trust those companies who are interested in not just profit, and expand the network. This can be understood from a conversation with the manager and his interest in your success, as well as the services and support offered by the franchisee. If you feel that the manager has little interest in features of your region, and only actively marketing its brand - it is an occasion to reflect.
Terms of purchase
Then, what to look for when buying a franchise - it's her conditions and all components of the package of services. The price of the franchise should be comparable to what you end up getting. For example, it so happens that in the contract does not provide the exclusive right to represent the brand in a particular region or district. And it can lead to kazusnoy situation where in your neighborhood will firm with the same sign and the other owner.
Payments
One of the most important aspects of franchise business - a payment. Therefore, when buying frashizy should pay attention to the size of one-time (lump sum) payment for the right to do business under the franchisor's brand, as well as the size of the regular fee (royalty). After all, the magnitude of these two financial components depends bargain franchise.
Terms of cancellation of the contract
It is equally important when buying a franchise to determine how the termination of the contractual relationship. Here, as in marriage - it is necessary to make an agreement before the divorce, not the process.
