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A franchise or a franchise is a relationship between entities when one party grants the other the right to conduct a certain type of business, taking into account an already developed business model. This form of business originated in the middle of the 19th century, and experienced a real rise in the 1930-1960s.
McDonald's is a classic example. So it’s worth exposing the main misconceptions about franchising that are getting in the way of entrepreneurs.
To be successful, you just need to choose the right business. Many businessmen decide to work only in the direction that they are familiar with. However, you shouldn't limit yourself that way. If you have never owned your own independent business before, then it is worth identifying at least your own professional skills shown in the corporate world. We need to understand what a person does better: management, marketing, delegation? If you have experience and good skills in one field of activity, then it will not be difficult to transfer all this to another business.
For business success, the main thing is to do what you really love. In fact, companies built around the personal preferences and hobbies of the owner have the highest failure rates. It is worth considering the franchise business as a stepping stone to the next level, the desired lifestyle. If a businessman starts choosing a franchise based on what he likes best, then the choice is significantly limited. One might even say that this approach is an entrepreneur's disadvantage. After all, a person drives himself into a corner and puts in a deliberately disadvantageous position. This simply ignores the huge number of possibilities that are simply beyond the boundaries of previous experience.
As soon as the best opportunity arises, it will be immediately visible. People dream of seeing this form of business in order to fall in love with it at first sight. True, such a decision will be emotional, is this acceptable for a thoughtful business person? It is always better not to rush to settle for a tempting option, but to take a break and think about everything. After all, even a simple acquaintance with the details and all the nuances of the proposal takes time. But in this way it will be possible to better understand what exactly the potential lies in the franchise. After all, it will simply be impossible to make the right choice if you make decisions based on momentary feelings, like a child.
It is impossible to do business if nothing is known about it. In fact, this is quite possible and there is nothing wrong with that. It's just natural for a person to stay in their comfort zone and stick to areas in which they have already gained experience. But for a franchise owner, the job is mainly to strengthen and grow their business. At the same time, the methods used depend little on the field of activity in which the business is conducted. After all, there are universal professional skills, which are the strength of every businessman. And to work with specific details, you can simply hire the right people. The path to success is buying a franchise system and learning more about it. Moreover, this business model has already been tested, it works. You just need to help her grow with the help of her talents and strengths.
The franchise does not give freedom, the rules are dictated by corporations. This myth about franchises is one of the most common. In fact, franchising has many opportunities to implement its unique ideas. After all, the franchisor dictates only one thing - the basic system, the framework in which the activity is conducted. The plus is that this system is time-tested and proven to be effective. The businessman is responsible for everything. That is why, within those very specific boundaries, he fully manages his business. It is not the corporation that determines who to hire and who to fire. And the choice of the location of the enterprise, its development at the regional level also falls on the owner. And the franchisor himself is extremely interested in the success of the licensed enterprise, because this is the only way he can make a profit. No one will waste time and money, preventing a person from expressing himself. This situation will prove to be a losing one for all parties.
Franchises stifle creativity. And this opinion is far from the truth. The only limitations that can affect a businessman are those whose effectiveness has been proven in terms of profitability. This can be uniforms, signs, recipes, technology, rulebooks, and so on. Such a framework, on the other hand, helps to represent the whole brand as a whole, and your own franchise business, as far as possible. However, the ability to come up with new ideas, corporate proposals depends entirely on the businessman himself. In fact, most parent companies encourage initiatives because this is how the best ideas get through. For example, the idea of selling Egg McMuffin breakfasts appeared in the McDonald's chain thanks not to the head office, but to one of the franchisees.
Not everyone can buy a franchise - it's expensive. It is worth considering a franchise as an investment in your own future. Who would refuse to make such an investment. There is a catalog of franchises, which shows that it can actually take from a hundred thousand dollars to launch some projects. But most franchises can start from ten to twenty thousand dollars. All you have to do is pay the parent company a one-time franchise fee, the so-called flat-rate fee. In the future, deductions must be paid monthly or in accordance with the established deadlines. Their size and frequency are usually determined on an individual basis. And operating costs will be exactly the same as they would be for any independent enterprise. This includes staff salaries and local advertising expenses. Simply in the case of acquiring a franchise, the company also receives the support of the franchisor, who will teach you how to work and immediately start working effectively. Thanks to him, profit indicators will reach their maximum much faster than if the company worked independently.
To become a franchisee, you will have to quit your main job. In fact, quite a few franchisee concepts have been developed just taking into account the employment of businessmen in other jobs. Many franchise owners are generally quite passive participants in the whole process. And this is advantageous compared to independent entrepreneurs who work for themselves full time.
The franchisee is very risky. Nobody says that there are no risks and a crash is impossible. This happens and not to say rarely. But most often this is due more to the actions of the franchisee himself, who decided to deviate slightly from the set rules, to cheat. This can be the use of low-quality materials, a change in the recipe or technology. Consistency and dedication are key to success. If a businessman does not want to adhere to time-tested and effective foundations, then the risks will increase. We should abandon the habits of the corporate world, taking only truly useful and versatile professional skills.