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 below.
