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.
