One of the greatest decisions and largest risks of a person or organizations life is starting a business. The next big decision? Whether or not to go franchise. A franchise business is one which is basically a duplicate of a previous business.
The business owner rents the franchise logo and way of running the business. Examples of franchise businesses include McDonald's, Pizza Hut, Taco Bell, etc. But what are the pros and cons of starting a franchise business, and what does the law say about the subject.
The pros of opening a franchise business are numerous. First of all, there is a lower risk of failure. This is often due to name recognition and the standard that is set by previous businesses. For example, most diners know what to expect when they go to McDonalds. Another pro of starting a franchise business is buying power. The collective buying power of franchise businesses is often enormous, creating an easy way for business owners to save money.
Still, there are cons to buying a franchise. On the on hand, the startup cost for a franchise business is often much greater than starting other businesses. In addition to this, buying into a franchise leaves little room for deviating away from the standard. Subway subs, for example, are to only contain a certain weight of meat and cheese. Everything is standard and there are few ways of making your stand out from the typical.
So what does the law say about the process of buying into the franchise business? When you start searching for the right franchise for you, you need to be sure that the franchise is legitimate. This is especially true if the franchise is a small franchise, a new franchise or one that you have never heard of before. Franchise law varies from state to state so this is going to depend slightly on the state in which you live. One of the best pieces of advice for any new business owner is to locate an attorney that can help you sort through the issues.
2 comments:
I like this post. I'll have to keep it in mind because I plan on running my own business soon. I know it’ll be challenging, but I’m up for it and will appreciate all the help I could get with the ins and outs of running a business. Instead of starting one from scratch, I've thought of buying a business. Any suggestions? Advice? Thanks.
@Marissa - It will be challenging, especially during this times, but don't let things bog you down. It'll be very rewarding in the end when you love doing what you do. That being said, I suggest weighing the options of buying versus selling. There are a lot of resources for buying a business. I know of this site called BizTrader.com, which is an online global marketplace where you can buy or sell a business. You can also use for other services, like finding a lender, or a broker. I also suggest checking out your local small business groups. Like, the site, you'll be able to know what's available in your area.
Good luck!
Post a Comment