A Franchise arrangement can be a very effective way to open and operate a small business concern, especially for those without a lot of experience in operating and owning their own business. There are many advantages in using a Franchise System, such as, turn-key operations; an established Marketing Plan; large corporate support; lower learning curve; established accounting, cost control and management systems; a strong Strategic Plan; brand identification; training programs; national and regional advertising; customer service programs; market trend responsiveness; supplier and vendor discounts; among others. However successful Franchise Systems are expensive. The fees / costs consist of a franchise fee, royalty fees and start-up costs. So it is very important to have a solid due diligence process in place to determine if a particular Franchise Opportunity is right for you, and whether the costs to establish and run the franchise match the effectiveness of the Franchiser’s Package Offering. As Business Plan Writer I recommend that you take the time understanding the types of franchise systems, how they work, their pros and cons, etc before you get into a particular franchise.
The Different Types of Franchising Systems
Product & Service and Trademark Franchises
The franchisee is given the right to sell a well branded product or service. Most of these franchisees will concentrate on selling one franchiser’s product or service offering, thereby indentifying and branding their business with the franchise. Examples include: Automobile Dealerships, Gas Stations, Soft Drink Bottlers, etc. The franchiser exercises little control over the franchisee’s business, with the product/ service integrity being the preeminent concern of the franchiser.
The Structure and Responsibilities
-- Franchiser provides a Standardized Product
-- Franchisee Pays Franchise Fees and Responsibilities include:
- Marketing
- Training
- Control System
- Operating System
- Accounting System
- Building, Equipment, Signage
Business Format Franchises
The franchiser grants the franchisee the right to utilize a marketing system that is proven and turnkey. Substantial guidance and assistance is provided by the franchiser. Types of franchises include Restaurants, Retail, Hotels, Business Services; Automotive Products, Parts and Services; Convenience Stores; Entertainment Centers and so on.
The Structure and Responsibilities
-- Franchiser provides:
- Building Plans
- Equipment & Signage
- Marketing System
- Business Plan
- Operating System
- Training Personnel
- Accounting System
- Control Systems
-- Franchisee provides:
- Fees
- Compliance
- Reporting
About The Article Writer
Frank Goley has a diverse background as a business consultant, business turnaround consultant, business plan writer, business plan expert, small business consultant, business coach, business plan consultant, marketing consultant, business planner and online marketing consultant, and seo consultant for ABC Business Consulting. He has been helping companies to succeed for many years. Frank wrote his first business plan over twenty years ago. He is an expert in developing business plans, marketing plans, funding plans, strategic plans, turnaround plans, web marketing strategies, and project specific business plans. Frank is the author of a business plan book, The Comprehensive Business Plan Workbook – A Step by Step Guide to Effective Business Planning, and he has over 140 published articles and e-books on business success strategies. He also writes the Business Success Strategies Blog and publishes the Business Success Newsletter. Frank has also written articles on How to Write a Strategic Plan.
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