No
matter what job you have, there are probably days
when you've just had it with excessive demands on
your time, conflicts with coworkers or company policies,
and pay raises that barely keep up with inflation.
At that point, you may start thinking about being
your own boss-realizing the American dream of owning
your own business.
You
may have thought about buying a franchise. In this
business arrangement, a franchisor (the parent
company) sells the franchisee (you) the right
to sell its goods or services in exchange for a
franchise fee. It might seem like just what you
need to make a big change in your career and your
life. After all, everyone already knows about Meineke
Muffler, Subway, Dunkin' Donuts, Stanley Steemer,
and hundreds of other businesses that have made
the roads going through most of America's towns
and cities look pretty much alike these days. As
a franchisee, you'd have the advantage of being
able to use the company's name, recognizable storefront,
and trade secrets. And you've heard that franchise
fees for some businesses run as low as $10,000.
But
do you really know what's involved in a franchise
agreement and in running a franchised business?
There is much more to it than paying the franchise
fee and opening the doors. While fees may seem fairly
reasonable (the majority are under $40,000), that's
only the beginning. You will need an upfront investment
that amounts to much more than the franchise fee.
For example, survey results in the article "Annual
Franchising Industry Overview" ( Bond's
Franchise Guides) showed an average of $27,300
for a motel franchise-but estimated start-up capital
or line of credit was $6,600,000. Even a smaller-scale
business category-say, a shop that sells donuts,
cookies, or bagels-carries an average franchise
fee of $24,676 with estimated startup capital at
$261,165. In addition, most franchisors have requirements
for your personal net worth.
Owning
a franchise is not easy, and anyone who goes into
one believing that the business will run itself
is destined for failure. It carries a lot of responsibilities.
In fact, you may feel that you're still working
for someone else once you learn about the restrictions,
requirements, and specifications that will be imposed
on you by the franchisor. You will need to unerringly
follow their practices and meet their standards,
and you will sign a contract that says so.
The
contract will also spell out what happens if you
want out or can't make a go of the business. Some
franchisors specify in their contracts that even
if you are running the business as a corporation,
you and your spouse can be sued as individuals.
You'll want to hire an attorney to carefully check
the whole contract over before you sign anything.
You'll also need an attorney to help you obtain
the business licenses you will need. If you will
be selling food to the public, you'll need a license
from the health department, and you will also need
to always be ready for surprise inspections.
But
let's say you've got enough saved for the fee, you've
got a more-than solvent net worth, you feel capable
of understanding and taking care of all the details,
and you can borrow the rest of the money you need.
What could go wrong? It sounds like a sweet
deal, doesn't it?
That
depends...
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Do you have enough money to run the business
until it starts turning a profit? This means
you will have to pay employees, pay for product,
make payments on your business loan, and send
the franchisor a monthly royalty of 4%-8%
of total sales (not of profit), depending
on your contract. Other initial and ongoing
costs include insurance, employee training,
inventory, equipment, rent, maintenance of
the site, and your share of advertising expenses.
Was the franchisor's projection of your earnings
overly optimistic?
Is your family behind you-even willing to
work with you? Does everyone realize that
you will be working hard at the business location
for all the hours it is open every day, and
that you will be the first one there in the
morning and the last one to leave at night?
do they realize that vacations are pretty
much out of the question for a long time now,
and that even if you manage a weekend getaway,
you're always "on call"?
How well do you interact with people? You
will be dealing with employees (some of them
unreliable), customers (some with complaints),
and your contact people at the parent company-in
effect, your new bosses.
If things get crazy, can you keep your cool?
Did you choose a business that you actually
enjoy and find exciting? Or did you just buy
yourself a job that has got you trapped even
worse than the one you left behind?
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An
Alternative Plan
There is a much less complicated way to achieve
financial independence and success without jumping
on a franchise rollercoaster that never stops. We
offer a viable, legitimate way to earn an exceptional
income without the huge investment, the loss of
freedom, or the sacrifice of time with your family.
As a home-based business owner, you'll work in the
peace, quiet, and comfort of your own home. You'll
set your own hours. You won't have employees that
drive you crazy. Instead, you'll work with a support
team that will mentor you in a professional, respectful
manner.
You can
ditch that going-nowhere job and be your own boos-without
the hassle of a traditional business. For free,
no-obligation information, simply fill out the web
form.