PerfectBusiness - The Entrepreneur Network to Create Your Perfect Business

Table of Contents

Web

Technology

Location

Legal

Personnel Management

Risk Management

Insurance

Business Success Tips

Sample Documents

Checklists

Contributing Authors

	Steven D. Strauss Author of The Small Business Bible
ORDER NOW: The Small Business Bible
	Stephanie Chandler Author of The Business Startup Checklist & Planning Guide
ORDER NOW: The Business Startup Checklist & Planning Guide
	Tom Severance Author of Business Start-Up Guide
ORDER NOW: Business Start-Up Guide
	Joe Kennedy Author of The Small Business Owner's Manual
ORDER NOW: The Small Business Owner's Manual

Buying a Franchise

Should you buy a business franchise? Franchise ownership has aspects of both owning your own business and working as an employee for someone else. It may be the perfect opportunity for someone who wants to own a business but needs a little more structure and a little less risk. Franchises are most appropriate for someone who has considerable financial resources to pursue their idea.

Here are some of the advantages:

A proven and tested successful concept reduces your risk of failure.
You often have a “turnkey” operation in a total package.
You have standardized products and systems that work.
You have standardized financial and accounting systems in place.
You have collective buying power.
The franchisor often provides ongoing supervision, consulting, and training.
You benefit from national and local advertising programs.
The franchisor often provides useful advertising and marketing materials.
The franchisor often provides uniform packaging.
You benefit from ongoing research and development of new products, new variations, new ideas, and new systems.
The franchisor may provide financial assistance in purchasing the franchise and necessary equipment.
You receive assistance in proper site selection.
You have detailed operations manuals.
The franchisor may provide sales and marketing assistance.
You are likely to receive planning and forecasting data and assistance.

Disadvantages include:

You lose substantial control in making major business decisions by being subject to franchisor guidelines.
Franchises are often expensive to purchase.
You are often liable for a continuing royalty and advertising fee.
Strict binding franchise agreements favor the franchisor.
Franchisor’s problems will reflect on your business.
The franchisor may restrict your choice of suppliers, products, or services.
You may have a limited territory and may be subject to another franchise opening within your territory.
It may be very difficult and expensive to sell or transfer ownership of the franchise.
You may not be able to exercise your full creativity and uniqueness.