{"id":444,"date":"2017-04-06T10:01:50","date_gmt":"2017-04-06T10:01:50","guid":{"rendered":"http:\/\/wordpress.oneviewcrm.com\/franchise4u\/?p=444"},"modified":"2017-04-27T15:58:21","modified_gmt":"2017-04-27T15:58:21","slug":"buying-a-franchise-business","status":"publish","type":"post","link":"https:\/\/www.franchise4u.com.au\/index.php\/2017\/04\/06\/buying-a-franchise-business\/","title":{"rendered":"Buying a franchise business"},"content":{"rendered":"

Buying a franchise business vs. starting your own- Weigh up the risks<\/strong><\/p>\n

For the most part, we all want to work for ourselves, but is owning a business all it\u2019s cracked up to be? We all have different ideas about what success means, but the one thing that can\u2019t be denied is that working for someone else may NOT be enough to achieve your dreams.<\/strong><\/p>\n

It\u2019s no secret that the wealthy in this world have one thing in common. They own their own business and therefore control their own destiny. The real question is not determining whether owning a business is the right move, but whether you should choose a franchise operation or a traditional business.<\/p>\n

Before deciding to purchase a franchise or start a business, \ufb01rst let\u2019s review eight main characteristics you should address before going forward. If you know where you stand in relation to these traits, you will have a much clearer picture of the type of business that will work for you. So, let\u2019s get going!<\/p>\n

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  1. Your aversion to risk<\/strong>– One of the biggest factors to consider before buying a business is knowing how much risk you are willing to take with a new business. In traditional business, you can win big but you can also lose big, too. The wealthiest people today aren\u2019t franchise owners. They are business owners who may have franchises as part of their model.<\/li>\n<\/ol>\n

    The risk associated with owning a franchise is predictable and usually much lower than a standard business. On the \ufb02ip side, if you have visions of making it big with a franchise, the reality is you\u2019re going to have to own multiple operations to make that happen.<\/p>\n

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    1. Your creativity, or lack thereof<\/strong>-Running a traditional business requires you to wear a lot of hats. You should be knowledgeable in marketing, operations, sales, inventory, human resources and so on. Creativity is important as small business owners need to resolve issues without the resources available in large corporations. However, with a franchise, the franchisor usually makes most of the decisions regarding marketing, systems, solutions, etc. If you are an independent and creative person who wants the freedom to try new things, then a franchise might not be for you. If you like more of a turn-key approach where you don\u2019t have to solve all the problems, then go with a franchise.<\/li>\n
    2. Your comfort level with planning<\/strong>-One of the most common areas in which entrepreneur\u2019s fail is planning or failing to plan. Too often people start a business without a business or marketing plan. They open their doors and hope they won\u2019t make too many mistakes. In a traditional business model, that\u2019s the \u2018kiss of death\u2019.<\/li>\n<\/ol>\n

      With a franchise, most of the planning, if not all of it, is already mapped out for you. They have all the systems in place. All you should do is follow the directions. Franchises work because of their systems. So, if you know you don\u2019t plan enough, then maybe a franchise is the right move for you.<\/p>\n

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      1. Being informed\u00a0<\/strong>– Quite often, \ufb01rst-time franchise owners dive into buying a franchise without any knowledge of franchise relationships. They don\u2019t understand the viability of the industry they are choosing, they don\u2019t conduct enough research on the company and they don\u2019t understand the legal consequences of the contract they are signing. Potential franchisees should have full knowledge of the above as well as the core values of the franchise and the franchisor.<\/li>\n
      2. Consider the latest trends\u00a0<\/strong>– You don\u2019t want to invest in a fad, but you do want to invest in a franchise that\u2019s current and relevant. Research what consumers want and need and look at what products or services are lacking in your community. Once you have chosen an industry, try to select companies that will have territories available in your desired area. Buying a franchise allows you to utilise the expertise of a current system to fast track your success, rather than starting from scratch.<\/li>\n
      3. Don\u2019t rush and choose wisely\u00a0<\/strong>– It\u2019s so important to do your due diligence before you make the decision to buy a franchise or start your own business. You must know how much you should invest, what are your strengths regarding running a business and what are your long-term goals?<\/li>\n
      4. Moving forward with your purchase\u00a0<\/strong>– When you make the decision to \u2018move forward\u2019 and buy a franchise or start your own business, your natural reaction will be to get going NOW. I totally understand. The reason you want to be an entrepreneur is because you can make the decisions and nobody tells you what to do. Instead, proceed carefully, as mistakes will occur during this crucial period. It\u2019s so important to slow down, take a deep breath and resist the natural urge to charge forward.<\/li>\n
      5. Consult with experts<\/strong>– Signing on the dotted line and making an agreement with the franchisor is serious business. Consult with a franchise expert \ufb01rst to see if owing a franchise is really the right decision for you. This can help you avoid disappointment, confusion, business failure and expensive litigation down the road. It\u2019s also a good idea to consult with an accountant familiar with franchises to understand all the tax and legal obligations as well as advantages involved.<\/li>\n<\/ol>\n

        Starting your own business<\/strong><\/p>\n

        Most people who plan to start their own business or become part of a franchise, do so because they want to be the boss. They want to control their future and their success. It\u2019s a great feeling to have that autonomy and freedom of making the business decisions. It\u2019s also very rewarding.<\/p>\n

        If you have the \ufb01nancial capacity to fund a start-up and the con\ufb01dence to manage a company, starting your own business can be the way to go. Even if you start your own company in the evenings and on weekends, while keeping your day job until it\u2019s up and running, being your own boss is a powerful draw.<\/p>\n

        But there is a higher failure rate among new business ventures than among franchises. There is no franchise support, no franchise community to ask for advice and it\u2019s often more dif\ufb01cult to get \ufb01nancing for a company that doesn\u2019t already have a track record. There are also no economies of scale in terms of purchasing power and negotiating real estate, no brand recognition and higher costs for things like advertising and design \u2013 costs that are shared in a franchise system.<\/p>\n

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        Purchasing a franchise<\/strong><\/p>\n

        Perhaps the biggest perceived drawbacks to purchasing a franchise are royalties and other fees paid to the franchisor. The trade-off is that many of the struggles of starting your own business are mitigated or eliminated. With a franchise system, you receive franchise support, purchasing power, shared research and development costs, real estate and legal help, construction assistance and a proven model with instant brand awareness. A franchise fee and royalty payment (usually a percentage of what you have made) are often a small price to pay compared to the \u2018tuition\u2019 charged by the \u2018School of Hard Knocks\u2019.<\/p>\n

        Franchises charge a fee for a reason. They have been through the pains and \ufb01nancial penalties of developing products, systems, and a brand image. They have tried and tested the business model. They have brand recognition and experience. Consequently, the failure rate for franchise systems is lower than most new businesses.<\/p>\n

        It should also be noted that not everyone \ufb01ts into the mould of being a franchisee. For some, the thought of being accountable for the rules and systems required by the franchisor is too constraining. Again, it\u2019s up to you to weigh your aversion to risk with your need for autonomy.<\/p>\n

        Things to consider no matter which you choose<\/strong><\/p>\n

        Consider what it really means to be your own boss. Being the boss of a start-up, whether it\u2019s your own or a franchise, also means that you\u2019re in charge of everything. This is a substantial responsibility.<\/p>\n

        Being the boss means leveraging your savings, sometimes even your equity, all for the privilege of sleepless nights worrying about payroll and outstanding bills. For many, these arguments are a strong reason to continue working for someone else.<\/p>\n

        But for thousands of Australians every year, living their dream of starting something from the ground up, even if someone else helps to point the way, is too big of a pull. Conducting research, asking the right questions of the right people, seeking expert advice and knowing some of the hidden risks ahead of time help to make sure your \ufb01nal decision is the right one.<\/p>\n

        Kevin has been involved in franchising for over 24 years. He has been a franchisee and franchisor. His exposure to franchising started with banking in NAB, then as a recruitment consultant for one of Australia\u2019s most successful franchise development companies. In 2006 Kevin founded Franchise Selection, a specialist recruitment firm that specialises in recruiting franchisees, nowadays his new company Franchise 4 U not only specialises in recruiting franchisees but also helps business develop their business into a franchise model and assists businesses with business coaching across the small business and franchise sector.<\/p>\n

        Contact Kevin Bugeja<\/strong><\/p>\n

        Managing Director, Franchise 4 U:<\/strong><\/p>\n

        Mobile:\u00a0<\/strong>0412 511 630
        \nEmail:\u00a0<\/strong>kevin@franchise4u.com.au<\/a><\/p>\n

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         <\/p>\n","protected":false},"excerpt":{"rendered":"

        Buying a franchise business vs. starting your own- Weigh up the risks For the most part, we all want to work for ourselves, but is owning a business all it\u2019s cracked up to be? We all have different ideas about … Continue reading →<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[4],"tags":[],"class_list":["post-444","post","type-post","status-publish","format-standard","hentry","category-articles"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.franchise4u.com.au\/index.php\/wp-json\/wp\/v2\/posts\/444","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.franchise4u.com.au\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.franchise4u.com.au\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.franchise4u.com.au\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.franchise4u.com.au\/index.php\/wp-json\/wp\/v2\/comments?post=444"}],"version-history":[{"count":2,"href":"https:\/\/www.franchise4u.com.au\/index.php\/wp-json\/wp\/v2\/posts\/444\/revisions"}],"predecessor-version":[{"id":499,"href":"https:\/\/www.franchise4u.com.au\/index.php\/wp-json\/wp\/v2\/posts\/444\/revisions\/499"}],"wp:attachment":[{"href":"https:\/\/www.franchise4u.com.au\/index.php\/wp-json\/wp\/v2\/media?parent=444"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.franchise4u.com.au\/index.php\/wp-json\/wp\/v2\/categories?post=444"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.franchise4u.com.au\/index.php\/wp-json\/wp\/v2\/tags?post=444"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}