busEach year Entrepreneur magazine lists their top-20 franchise business opportunities based on financial stability and income potential. Many of these opportunities listed in the top 20 were started by business people who were answering a need they recognized in their communities. These businesses have start-up costs that range from $3500 to well over $1 million. The vast differences in start-up fees indicate there is a wide variety of franchise opportunities for those who want to invest a small amount or for those who are willing to take on investment partners.
Basically, a franchise is a way of distributing products or services through retail outlets owned by 3rd party operators. These businesses are purchased for an initial investment fee as well as continuing royalty fees paid over the course of the lifetime. Royalty fees are used to run the corporate office; offer global advertising; and provide support, training, and consistency from unit to unit.
Franchise business opportunities are a wonderful way of mixing fun and profit. The ones with lower initial costs will especially give franchisees the ability to own a business, sell a product, and enjoy the profits while requiring only a low up-front franchise investment.
Another advantage is that they are available in almost every type of industry. Before investing, you need to ascertain that the franchise you are considering is the right fit for your personal likes and dislikes as well as a match for the time and energy you have available to invest in the product or service. There are opportunities ranging in industries that serve pet owners, eateries, legal needs, printing requests, and commercial cleaning, to name just a few.
Prospective owners will want to consider all the contract terms prior to purchasing a franchise. For example, a franchisee needs to pay close attention to the legal agreements, so to stay away from a breach of contract. If the contract is for a defined time period, there may be no guarantee that you will be able to renew for another specified period of time. The corporate office may be able to terminate your business if you fail to pay the royalties or breach the performance standards. Keep in mind too, that renewals of the franchise may not have to contain the same terms and conditions as were in the original contract.
Considering expanding your non-franchise business
But, what if you already own your own non-franchise business and are considering expanding your territory or growing your business beyond one, two, or three stores? Then offering franchise business opportunities to others may be a way of increasing your production potential while decreasing your risk. Consider the differences between opening another storefront yourself and offering several franchises to others who would open the stores, do the work, and pay you the royalties. It is truly a win-win situation for both the corporate owner and entrepreneur.
From either the standpoint of a business owner who wishes to expand his business line or a new entrepreneur, there are many advantages to using franchise business opportunities. But, before making an initial investment or deciding to offer an opportunity to others, you must decide whether the product or service warrants the development of such a business.
The type of business is a key consideration in determining if a business warrants being offered or if it is a viable opportunity worth your initial investment. Any franchise venture you consider should be based on a product that has pizzazz, quality, superior service, reliability, and a strong trademark. In order for products to be sold successfully, they must be consistent from store to store to meet customer expectations, they must be something that can’t be purchased at just any other store, they must be brand recognizable, and they must be of superior quality. These are the necessary criteria that must be met before you develop a franchise or make the initial investment to purchase one.
