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Advantages of Franchising
The franchisor offers
A system that works
Training and initial business set-up
On-going back up and guidance
The franchisee receives:
Benefits on a national scale
The benefits of bulk purchasing
Administration system
Advantages of Franchising
Advantages of Franchising
• The franchisee:
• Has the services of trained field staff
• Has the benefit of the use of the franchisor’s
patents and trademarks
• Has the benefit of continuous research and
development
• Being part of a franchise group can be fun
Questions for You
• Do I understand franchising?
• Am I prepared to handle the workload and
long hours?
• Do I have sufficient financial resources ?
• Do I mix well with people?
• Will I be able to handle staff?
Questions for You
• Do my family wholeheartedly support me?
• Will the business be sufficiently challenging?
• Can I accept the disciplines of a franchise
system?
• Is the franchise route the best for me?
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Questions for You
• What are the total start up requirements?
• What initial services are offered?
• What training is offered?
• Can you obtain a business plan template?
• Does the franchisor assist in launching the business?
Questions for You
• What franchise fees are charged?
• What advertising and promotional support is offered?
• Does the company have field support staff?
• Can you speak to current franchisees?
• Is the group a member of a franchise association?
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Your Homework
• Make sure you do sufficient research
• Use a lawyer and accountant that understand franchising
to advise you
• Speak to franchisees
• Develop your own business plan
• If you are ambitious and persevere you can be a success
Franchise Success Factors
• Does the franchise operate in a large growing market?
• Is the growth in the market sustainable?
• Are the margins sufficient to cover the monthly
royalty?
• Can the product demand a price premium?
• Does the franchise have access to sufficient capital?
Franchise Success Factors
• Is the brand well known or does it have potential to
become a brand?
• Is there a high barrier to entry?
• Will start-up costs give you a enough return on
investment?
• Does the group have a franchise culture?
• Does the franchise have a good leader? 18
Kids - their education and activities
Seniors - services and products
Pet - related services
Fitness - related services
Environmentally friendly products and services
Healthy fast food
Franchise Success Factors
• Do the management have experience
• Number of franchises in operation
• Number of franchises closed
• Years in operation
• Good training
• On-going support
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The Franchise Package
• Franchise agreement
• Disclosure document:
• Legal name, trading name, registered office and addresses
• Franchisor directors names, address, job title and qualifications
• Experience in this business
• Auditors, bankers etc.
• Business plan
• Details of legal proceedings for debts or other
The Franchise Package
• Information about franchise
• What’s included in the franchise purchase
• Financial contributions the franchisee has to make
• List of existing franchisees
• Financial information
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