There are as many types of franchises as there are businesses. The franchise model is usually a safer way of starting a business for the first time. Many would-be entrepreneurs fail at their first attempt in business when they start on their own. A franchise business can give people the knowledge that is required to run a business and this knowledge can be used successfully in any future business.<\/p>\n
Anyone seriously considering the purchase of a franchise will ultimately have to decide if a \u2018service\u2019 franchise or \u2018retail\u2019 franchise is a better fit. It\u2019s an important distinction in terms of both entry requirements and operational realities, and it\u2019s a decision that can determine your ultimate effectiveness as a franchise operator.<\/p>\n
First, a basic summary of some typical service franchise opportunities available today, here are just a few: trade and handyman (electricians, plumbers), lawn maintenance, landscape services, childcare, tutoring, education, business coaches, accounting, bookkeeping, real estate agents, travel agents, commercial and domestic cleaning, automotive-related services, computer-related services, and interior design\/decorating.<\/p>\n
With this is mind, consider that service franchises generally can offer more economical start up and operating costs and often require much less personnel for daily operation. A service franchise is frequently home-based and allows for – and often requires – a lot of mobility. Of course, there are pros and cons to this business model.<\/p>\n
Service franchise advantages<\/p>\n
Service franchises typically allow you entry at a fraction of the cost of a retail franchise – often just a few thousand dollars of investment compared to six figures for many retail opportunities. Yet, the income potential is still attractive and can be considerable. So, there\u2019s the affordability factor and a lower upfront risk from day one.<\/p>\n
There\u2019s also a wide selection of opportunities and niches in the service franchise sector. And many of these businesses have a healthy and constant demand (plumbing will always need to be repaired, for example).<\/p>\n
Service franchises are typically \u2018skills based\u2019 and offer those with the ability, interest, and dedication to be active and \u2018work with their hands\u2019 as they build their business. Because many service franchises do not require a bricks and mortar location for franchisee operations, overheads are typically much lower. It\u2019s very easy to turn a quick and healthy cash flow when you work from a home-based office. And with very few employees, your staffing headaches can be minimal. And later, the lack of a physical location makes it easier to take on
\nadditional territories at a minimal cost.<\/p>\n
Additionally, working hours can be flexible – often by appointment only – so you\u2019re not restricted by long retail hours. This can be a big plus for some lifestyles. But keep in mind, like most businesses, the more you work the more you earn.<\/p>\n
Service franchise disadvantages<\/p>\n
Because of the nature of the beast, service oriented franchises may not offer the kind of customer and transaction volume you\u2019d find at a retail franchise. That fact alone can limit your degree of profitability. Especially, if you are a one-person operation, there are only so many appointments you can make in a day. And small operations can become seriously derailed in the case of personal illness or any major sickness.<\/p>\n
Also, some service franchisees can limit the number of employees you have and can also restrict your territory. You\u2019ll want to ask about this right off the bat. And, it\u2019s not uncommon to have to function as the owner\/operator as well as the employee (you wear all the hats). You may be providing electrical repairs for your customer by day while marketing your business and handling paperwork by night.<\/p>\n
And some trades, such as plumbers and electricians, require technical knowledge, certification, and continuing education. That could occupy time that would otherwise be spent making customer calls.<\/p>\n
Retail franchising<\/p>\n
Retail franchising is the kind of business operation that most people are familiar with today. After all, everybody knows McDonald\u2019s and KFC, but there\u2019s much more to know about retail franchising. Like its counterpart, service franchising, retail franchising offers its own set of
\npros and cons. There are advantages and disadvantages that make it unique. In the right circumstances, retail franchising can make a very good career choice and provide a healthy income for many people. But you\u2019ll want to do your homework and make careful considerations.<\/p>\n
First, look at the crowded playing field. Retail franchises are available in everything from QSR (quick serve restaurants), to dry cleaning stores, to appliance and furniture rental stores. There are literally thousands of opportunities. Often, brand recognition makes this kind of franchising very popular, but that big brand name can come with a price. Capital investment and start-up costs for some retail franchise brands can easily top $500,000, and up. But properly executed, the potential payoff can be significant.<\/p>\n
Retail Franchising 101<\/p>\n
If retail franchising sounds attractive to you, begin by taking a personal inventory. Examine your skills, interests, and financial situation. Do you like to engage with people (both customers and employees) regularly? Are you averse to retail hours (night and weekends)? Be honest with yourself. Also, do you have access to the significant amount of capital that may be required to get started? Can you afford to take on this kind of debt and risk fiscally and emotionally? These are all important questions you\u2019ll want to consider. If retail franchising still looks good to you, then proceed to examine and define the brands and concepts that you could see yourself being a part of.<\/p>\n
Keys to success<\/p>\n
If you are going to choose a retail franchise concept, one of the keys to a successful retail operation is, as they say in the real estate industry, location, location, location. A retail franchise is driven by solid, consistent traffic. Look for locations or territories near you that
\ncould support a retail franchise. You\u2019ll want some competition, but not too much. You\u2019ll also want to choose a retail franchise concept that would fit your market. For example, if you live in a colder-climate northern state, that has short summers, a frozen yogurt franchise might not be such a good choice. But, perhaps, burgers would be in high demand more consistently.<\/p>\n
One of the biggest differences between a service franchise and a retail franchise is the employee factor. You\u2019re going to need them – lots of them – in a retail franchise. This means you\u2019ll need to hire, train, retain, and yes, fire employees. HR is a big part of operating a retail franchise concept – and becomes even more so if you expand to operate multiple locations. Finding and keeping quality employees can be a challenge, but when you do find them, they can make your operation really shine. Of course, bricks and mortar retail locations
\nrequire building, remodelling, maintenance, and updating from time to time. There are also permits, insurance, and all kinds of regulations to stay on top of. But if you like to manage actively, work with a variety of people, and can delegate responsibilities, then retail franchising may be perfect for you. And, when you build a great location with high traffic and satisfied customers, you\u2019ve built a successful business. You\u2019ll certainly want to evaluate how these pros and cons measure up for you. For many who are active and like to be right in the middle of the action, a service franchise may be just right choice.<\/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
You can contact Kevin Bugeja,<\/p>\n
Managing Director Franchise 4 U<\/p>\n
to discuss your needs at: There are as many types of franchises as there are businesses. The franchise model is usually a safer way of starting a business for the first time. Many would-be entrepreneurs fail at their first attempt in business when they start … Continue reading
\nMobile: 0412 511 630
\nEmail:\u00a0kevin@franchise4u.com.au<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"