The Franchise Business Model: The Pros And The Cons – Episode 3 – Part 3
Have you thought about investing in a franchise? Perhaps you own a business and you’re thinking about allowing others to invest in your business by purchasing a franchise. What are the pros and cons of franchising? Join business coach, Clay Clark, and franchise guru, Terry Powell, as they discuss the incentives as well as the detriments to franchising. Franchise fees, they’re a hassle, but inevitably they’re something that you’re going to have to pay when purchasing a franchise. What exactly are franchise fees you may ask. You’re essentially paying for the license to operate that business that someone else has built. Franchisors don’t typically make money off of the franchising fee, they’re typically used to repay the fees associated with franchising the business in the first place. Another thing to take into consideration are the amount of legal requirements that go into franchising. Spoiler alert, it’s probably more extensive that you would think. There’s quite a bit of documentation that is in play for franchises, differing by states, but luckily, the federal trade commission monitors and regulates all franchise agreements to ensure equality. Little things in business can add up. You need graphic design work done, you have to subcontract it out. You need a new operations manual made, you have to hire attorneys to put it together. One good thing about franchising is that all of that is done for you by corporate for a fraction of the cost. So where fees may be slightly frustrating to pay out each month, you’re essentially able to save money on many different small tasks that do add up. The hardest part is often already done for you when it comes to franchising, and all you have to do is implement. Want to learn about the other pros and cons to franchising? Check out the rest of the videos in the series for more helpful tips.