Thought Leadership presented by Cartridge World
There are thousands of franchise concepts in the world, and the number is growing. For those looking to invest in their own business, the franchise model should be well tested, have supportive systems and reflect the process needed for success.
I have been fortunate enough to be a corporate employee for nine years, an independent entrepreneur for 14 years, and a master franchisee/franchisor for the past 14. To be in business is a freedom many people in the world will never know. The freedom to make choices, work as hard as you want and can, be as creative as possible and attain deserved financial success are all benefits of being part of the franchise industry.
Franchising: How to make it work
A large majority of people looking for a franchise have never been in business for themselves and may lack the full range of professional knowledge and training needed to run a business. However, franchising may be still be a very good option for these people to launch into the world of business ownership.
All franchise systems are monitored by the Federal Trade Commission (FTC). The FTC uses something called the Franchise Disclosure Document (FDD), which has most of the details needed regarding the Eexecutives who run the franchise, as well as information on the stores that are open and even those that have closed. It also may spell out some earnings in what is called the “Item 19,” and will detail costs of opening the franchise. This document outlines responsibilities of both parties and protects each party down the road.
The greatest need I have seen with potential franchisees is having a system to follow. A classic mistake people make is to invest in a business and then not follow the very procedures and systems they researched and invested in. The very fabric of franchising is to be in business for yourself, just not by yourself. Studying and following proven systems, learning the industry, being open-minded and executing a plan signed by both the franchisor and the franchisee is the best path to success for both parties.
Most franchise systems have a royalty of 6-15% of each dollar and a national advertising fund fee of 2-6% of every dollar, which is used for advertising the brand and its products. Because of the royalty the franchisee will be paying and the franchisor will be accepting as per the FDD, both parties should ideally have a common goal of growth and success.
Here is a takeaway: The development of franchising over the last 60 years has provided a vehicle for hundreds of thousands of people to reach for and achieve their entrepreneurial dreams with the support, guidance and tools a sound franchise system provided.
Reach for your dreams now!