Franchise is an interdependent business in which three basic things are shared by the franchise owners. It is a profitable business to start the franchise of an internationally recognized company.
Franchise is an interdependent business in which three basic things are shared by the franchise owners. It is a profitable business to start the franchise of an internationally recognized company. It is a sound idea because the company has been established well in the world and you are going to use its name, model and procedure.
- The franchise owner shares brand identification and sells the same product in an established way.
- They share business model which have already gained success. They share common marketing and distribution system which allows them to work efficiently.
- The main idea behind these things is to get large market share and gain more customers as compare to your competitors.
When you franchise your business then you sell a product using your brand name. People invest their money to get your product or services brand to utilize your system and customer support. There are enormous benefits of buying a franchise business and the owner enjoys it because he gains a model and system to work on. The franchise owner will feel comfort from the common problems as other business owners have such as customer support or marketing etc. In a franchise environment you can meet new and latest challenges.
You need to know things that when and to whom you should franchise your business because the individual can be unsuccessful in running it properly. You should know four basic things before franchising your business.
- You should prepare standard disclosure document for your franchise. It is prepared by the Federal Trade Commission and is called Uniform Franchise Offering Circular (UFOC). Different countries have different rules and regulation about franchise business so you should know them to avoid legal complexities.
- You have to prepare audited financial statements for the company you are franchising. It is a legal requirement and before completing an audited financial statement you cannot fulfill other legal requirements. An experienced accountant is required to prepare financial statement and can provide advices about financial structure of the company.
- You should document your business and franchise system. This documentation is the guidelines to run your business according to the set rules and regulations. It helps your franchise to be successful as it was in the initial stage of the business. You can form your market plan to drive new customers.
- You should be mentally prepared to run franchise business. There is difference between your franchisers and employees therefore treat them according to their status. Franchisers are like partners so their scope and rights are different than the employees.
It is a great way to expand your business so you should plan it properly and understand all the legal requirements. So do research as much as you can and know all the basics of franchise businesses.