Food Franchise

Posts Tagged ‘Own Business’

All Chain Restaurants are Franchises
Whenever people see a chain restaurant, from Outback® to Olive Garden®, they always assume it is a franchised unit. However, there are two business models that these chains commonly use. The first involves selling franchises, and the other involves hiring individual store managers to run corporate owned locations. You might be surprised to learn that the following chains do not franchise: Cheesecake Factory®, Lone Star Steakhouse®, O Charleys®, and Bob Evans®.

Buying a Franchise Means Guaranteed Success
Although your odds of success are statistically higher with a franchised business, there are no guarantees. Even with a proven business concept, no business venture is without risks. Hundreds of franchised businesses close every month. However, studies show that the most common reason a franchise fails is because they do not follow the system.

It’s Wasteful to Invest in a Franchise, Just Open your own Business
All franchises have an initial fee that must be paid to open a location. Some people view this as a waste of money. However, studies show that nearly 95% of franchised businesses remain open for at least 5 years, and 94% of franchise business owners consider themselves successful. The money you give the franchisor lets you in on a proven business model that will make your business much more likely to succeed.

You need to be Wealthy Already to Invest in a Franchise
Although it can cost tens of thousands of dollars – or even hundreds of thousands – you do not necessarily need to have that much in your bank account. There are multiple different ways you can finance a franchise. Examples include personal loans, self-directed investments, small business administration loans, and home equity loans.

Running a Franchise Business is Easy
Although a franchisor will provide the franchisee with training and direction, the day-to-day operation of the store is your responsibility as the owner. There is no such thing as an easy business opportunity. Even with a proven business plan, to be successful you are still going to have trials along the way.

Opening a Franchise Business is Cheaper
Some people assume that opening a franchised business will be cheaper then opening up a traditional business since they will save on marketing costs. Unfortunately, even with a very well known franchise, you will still need to allocate funds for marketing. Additionally, royalties and fees can frequently offset these savings.

Higher Initial Fees Means Better odds of Success
The old saying, “the more money you invest, the more money you make,” is definitely not true when it comes to franchises. Just because the initial fee is sky-high does not mean that you will have better odds of success. As we mentioned before, all business ventures include risk, and there is never a guarantee that you will be successful, no matter what franchise fee you pay or what the franchisor tells you.

Sacramento is known for its moderate climate and a good supply of labor due to the various immigrants. It is a good place to start a new business. If you are planning to open a new business in Sacramento, why not give a thought to ‘Franchising’? The probability of success in running a franchise is much more than a business, since the brand name is already established.

When you start your own business, since the business may be small at first, you could have a tough time getting bulk discounts and reputed suppliers. Sales too could take time to pick up. Franchising simply means riding piggyback on the hard work of another company. Once a company establishes itself in the market, for example Pizza Hut or Nike, then that company wishes to sell its products to consumers all around the world. Since it is not possible to personally run the show across geographical borders, they start appointing franchises, which are clones in the way the business brand is projected.

These franchises have the same appearance and style of functioning as the parent-company. Every business has its USP like Pizza Hut might have different types of crusts for its pizza or Kentucky Fried Chicken might have its chicken cooked in a particular style. This USP has to be replicated across all the franchises to attain uniformity and enable it to sell the products effectively. Building your own business USP might take longer, whereas, you get this USP automatically with your franchise. Of course, you will have to pay the franchise fees along with many other fees to get a particular franchise.

Before going the franchise way, you should research on the type of products you would want to market, and mainly products that are in demand in the place where you propose to start your business. So in order to start a pizza franchise or a shoe franchise, you will have to survey in the areas of Sacramento where your products will sell. If you already have a place in downtown Sacramento, then you will have to research as to which products will sell from that outlet. You will then have to contact a particular company who wishes to have a franchise in your neighborhood of Sacramento. You can check out advertisements in your newspapers and also the Internet. There are numerous advertisements on the Internet offering various franchises from pizzas to pet care shops to auto repair shops.

Once communication is established, the parent company might send a team to inspect your premises. You will also need to get an estimate of the total project cost including the franchise fees and the cut, if any, which they could claim from your profits. The Federal Trade Commission has formulated a rule for all franchise agreements called the Uniform Franchise Offering Circular [UFOC], which ensures that franchisers do not mislead or cheat franchisees. Hire an efficient Attorney who is conversant with these rules to guide you. Your franchise agreement should be clear about the franchise fees, your percentage of earnings, the parent company’s support like advertising, their after sales support, etc. You should also have a plan about your expected sales and profits from that franchise.

Check the above points while starting your own business and if you see a definite advantage in turning into a franchise, then go for it.