All About Franchising You Wished to Know But Had No One to Ask
Franchising is one of those business models everyone experiences in their daily life but doesn’t know much about. They are often confused about how they are created or how they can get involved in having one themself. All of these things are questions that people want to ask, but are either too shy to ask, or don’t know who to ask. Here are some of the most important things you have wondered about a franchise and need to know.
What Franchise to Choose?
Any person involved in the business is looking to maximize their profits while minimizing their expenses. This is Business 101 and should be the primary goal on your mind whenever you are looking to run a franchise. How do you know what is best for you? You have to take a look at the franchises themselves and see what has the widest profit margins in your area.
Your area does matter, as individual franchises might not be available in your city or country. If you are in London, for example, you need to be able to see what franchises will allow you to license a store in the city. There are many services out there that will enable you to see the available UK franchises and how they can benefit you. You will have access to their financial records and will receive coaching and advice on which one is best for the area you are going to be working in.
These services can also train you in running a franchise. This is quite important, as if you have no knowledge of the best franchise possible for your area, they will help you along and get you started. Knowing what franchise and how to make the most money is a question you definitely need the answer to.
How To Start a Franchise
People view franchises as money printing machines. If you are able to own one, then you will be set for the rest of your life. Despite thinking this, not many people know how they can go about starting a franchise, or how they can make this kind of money. Starting a franchise is not as difficult as it sounds.
The first thing that you have to do is make a pitch to the corporation for the license to the franchise. You have to show them that you are a hard worker and that you will do your absolute best. Corporations are very selective on who gets these licenses for a few reasons.
First of all, if they produced too many licenses, there would be too many of their stores around. While competition is great, a corporation does not want two of their own stores competing for each other’s business. For this reason, they like to keep the number of licenses low. Secondly, by opening a franchise, you are taking on that corporation’s name and its brand recognition. Whatever you do in the store is a reflection of them and their company morals. Therefore, if you run a store extremely poorly and treat customers badly, it ruins their reputation. If your store shuts down, people will not look at you as much as they look at the corporation.
By making these licenses hard to get, they ensure that they are only getting the best of the best to run their stores. Create a pitch for them and show them you have the drive, and from there, if approved, they will let you start a franchise.
How Does Advertising Work
Once you start a franchise, do you have to advertise for it? The great thing about that is that most advertising will be taken care of by the larger corporation. Therefore, you don’t have to spend any money to get yourself on the television or the radio. You can rent out signs in your area if you want, but any large scale marketing is already taken care of.
In terms of promotions, these are also planned out and executed by the corporation. Whether it be a sale or a contest, they will equip you with all the tools to run the promotion, while also ensuring that it will result in profits for you. One of the best things about having a franchise is that you don’t have to worry about advertising costs like a small business would.
How Long Will It Take To Turn Profits
While franchises are great for making money, it takes time to pay off your initial investment and the costs behind the franchise. While you will make money, it will take a few months before you have made that initial investment back. This is why you have to sit down and calculate how long it will take and how long you can afford to operate.
Getting the best franchise for the area might be a great idea; however, it might be too much money for you to handle. You need to weigh the pros and cons of your investment, and you need to find one that will generate you some money, but will also not bankrupt you when you purchase it.
Typically it will take about half a year to start earning a real profit on your investment. Are you able to handle that long a time period? If you cannot, as mentioned above, look to find a cheaper franchise, or you can try to find investors to put money in as well. If all else fails, you can also apply to the bank for a loan. Each franchise has a unique time period to turn profits, make sure that you figure out what yours will be like.
Hopefully, this answered some of the questions you had regarding franchises and how they work. If run correctly, you will stand to make a lot of money over the next couple of years. Remember that it takes a lot of work to run a franchise at first, and there will be plenty of stress. By sticking with it, though, you can create a fully self-sufficient business that doesn’t even need you anymore to run. What questions do you have about franchises?
