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Franchising and Ongoing Support Considered
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Generally those looking into franchising do so because they have been laid-off or have experienced an unanticipated career change in their lives. Thus, they consider running their own company, as a solution. But if they do not know how to go about starting a business, they will consider buying a franchise because the franchisor will give them a proven business plan, start-up assistance and ongoing support.
It makes sense that the franchisor would want to do this because they are collecting ongoing royalties, and they want the franchisees to succeed so they can keep getting their money. It's basically a win-win situation, and perhaps, that's why the franchising business model is the greatest business strategy in today's world.
If you doubt that last statement, please consider that there are 550,000 franchised outlets in the United States of America, and this accounts for more than $1 trillion in sales per year. That's obviously not chicken feed. Having ongoing support means that "you are in business for yourself but not by yourself," or at least the franchising industry mantra claims.
Still, as a franchisee you should be a little bit skeptical about the ongoing support that you are promised in the franchise disclosure documents or FDD. Why would I say something like this?
It's simple really, before retiring I was a franchisor founder and I had operated my company for about 27 years in total. We worked very hard to give our franchisee support because we knew we had to in order to insure that we could collect our royalty money to keep the business going. But when it comes to ongoing support from a franchisor, let me tell you, all franchisors are not created equally.
Some franchisors will send support staff to the "franchised outlet" to make sure they are complying with everything in the franchise agreement. Then audit the books to make sure there is no cheating on royalties. This isn't really support it's more like enforcement, and big brother. There is a big difference.
Support, would mean that they were helping you, at least that's the indication you would get upon hearing that word. But you must realize just because the franchisor is promising you support, doesn't mean they are going to give you the support you actually need.
This is why I when I consult franchise buyers, I often recommend they talk to other franchisees in the system and ask about ongoing support, and if it is worth the royalties they are paying. If you do that before you buy the franchise, you will begin to understand my comments here. Please consider this.
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Lance Winslow is a retired Founder of a Nationwide Franchise Chain, and now runs the Online Think Tank. Article Source: http://EzineArticles.com/?expert=Lance_Winslow |
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Article Submitted On: November 21, 2009
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MLA Style Citation:
Winslow, Lance "Franchising and Ongoing Support Considered." Franchising and Ongoing Support Considered. 21 Nov. 2009 EzineArticles.com. 9 Feb. 2010 <http://ezinearticles.com/?Franchising-and-Ongoing-Support-Considered&id=3306802>.
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APA Style Citation:
Winslow, L. (2009, November 21). Franchising and Ongoing Support Considered. Retrieved February 9, 2010, from http://ezinearticles.com/?Franchising-and-Ongoing-Support-Considered&id=3306802
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Chicago Style Citation:
Winslow, Lance "Franchising and Ongoing Support Considered." Franchising and Ongoing Support Considered EzineArticles.com. http://ezinearticles.com/?Franchising-and-Ongoing-Support-Considered&id=3306802