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How to Buy a Franchise

How to Buy a Franchise

Buying a franchise can be a good solution for the budding entrepreneur.

He has the opportunity to reduce their own risks, since it already gets spent and proved the effectiveness of its own business model.

The essence of a franchise

Franchising is a special kindeconomic relationships in which one party (the franchisor) transfers to another (the franchisee) for a fee (royalty) the right to a certain kind of business. In particular, the franchisee receives the right to operate under the franchisor's trademarks, as well as the use of the waste business model.
Despite the fact that as the number of firms operating in the scheme franchise Russia, is relatively small, this business becomes more and more popular. The reasons for this trend somewhat.
The advantages of buying a franchise isthe use of tried and tested over the years the business model of the organization, which has already proved in practice its cost-effectiveness. The franchisor can help with the difficulties encountered in the conduct of business, in particular, to form the optimal range, to provide the adjusted system of logistics and so on. In this case, the franchisee has an economic and legal independence.
Opening a business franchise, entrepreneur already has a pool of loyal customers to the brand, thus reducing the marketing costs of the company.
For business it is easier to plan their business, because it can get from the franchisor amount of investment costs, as well as a detailed business plan.

How to choose a franchise

Before you decide to purchase a franchise,you must carefully analyze the offer of the franchisor. Open access presents a huge number of proposals for the opening of the franchise business. It is necessary to initially determine the desired direction of work (trade, restaurant business, etc.), And then choose from the subject companies based on their investment opportunities.
Further analysis should be based on assessmentthe market potential of the business idea in the region, as well as directly to the franchisor. The first stage is to consider the idea of ​​the prospects on the basis of population, the competitive environment, as well as availability of adequate retail space. It declared the franchisor rates of return and payback of business may be relevant only in relation to the major metropolitan areas, and in a small town such a business can be a success.
Evaluation of the franchisor should be comprehensive, based on a number of criteria:
- Experience of the company in the market-
- The number of companies working on the franchise, their financial performance, dynamics and opening zakrytiya-
- The presence of a registered trademark znaka-
- Conditions of biznesa-
- Requirements to suppliers of materials and equipment - many unscrupulous companies seek to make money on this, offering obviously unprofitable, onerous conditions franchayzi-
- What support is provided by the franchisor.
Finally, it is necessary to assess the overall impression of the communication with the franchisor.
It is also advisable to contact already working on this franchise companies, in order to know the possible pitfalls associated with the conduct of business and resulting in their complexity.

Of what there is franchise value

The cost of a franchise is made up of several components. As a rule, the contract provides for a one-time fee for the right to use the trademark. He also called lump-sum payment.
Also in the contract may be prescribed amountcharges for the use of the franchise (fixed, one-time or a percentage of sales). These payments are called royalties and are a kind of rent for the trade mark. However, such a requirement may be replaced by regulated amount of monthly purchases from the franchisor.
Some franchises are also provided monthly or annual payments to the marketing fund.
In addition to these payments an entrepreneur also has all of the standard costs - rents, repair facilities, purchase of equipment, staff salaries, etc..

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