Franchising has become one of the most important and effective business growth strategies in the past quarter century. Although franchise system development dates back centuries to the times when monarchs awarded territories to tax collectors, current franchise business systems date back decades to the Singer Sewing Machine strategy of granting rights to individual business people to sell Singer products in various regions.
A Franchise strategy allows the Franchisor to penetrate, develop, and dominate markets on a simultaneous basis. A Franchise system also allows for each individual Franchisee to own their very own business, and yet participate in, and garner value from, a proven Franchise system.
A good Franchise system allows the Franchise Company to gain market share quickly, which serves as a barrier to competition, and helps build the Brand, which in turn creates exponential value for all stakeholders – including each Franchisee.
So how do you identify a good Franchise system? Well it makes sense that if you want to find out about strategies, culture, and compatibility, then you should ask the right questions. The answers can then be assessed to determine if the fit is right.
The following discussion covers five questions that should always be asked by the Franchise Candidate. If a Franchisor is either unwilling, or unprepared, to answer these questions, it should be a strong indicator that the fit may not be right.
How Big Is The Market?
The Franchisor should have a good handle on the available market for the product or service that you will be offering as a Franchisee. Presumably the Franchisor has done extensive research on the current market size, as well as the potential market size for the future.
The Franchisor should be willing to share that information with you so you can assess the data to make sure that the opportunity is going to be of sufficient size to satisfy your own goals. You may have to sign a non-disclosure agreement first, but the information is important to you, so it must be assessed. The whole idea of Franchising is to ensure that the goals and dreams of the Franchisee, and those of the Franchisor, are unified. If the market availability will allow for strategies to be implemented by you, which are consistent with your goals, and those penetration goals are congruent with the Franchisor’s goals, then all is good.
If it’s a long-standing and stable market, then there should be plenty of statistics to back up that conclusion. If it’s a new and burgeoning market, there should be analysis that you can assess to give you a comfort level that you, together with Franchisor, can go get a significant share. If it’s a fad market, or limited life market, then the strategies should reflect that, as should the agreements.
The caution is that if the Franchisor is wishy-washy about the market, or is unwilling to discuss the issue in depth with you, that should be a significant warning sign.
Who are The Competitors?
The Franchisor should have a good understanding about the competition, and how much market share they command. It doesn’t matter how big a market is if it’s completely saturated, unless the Franchisor has specific strategies to eat someone else’s lunch.
The Franchisor should be able to talk to you about specific competitors, what their strategies have been, what they will likely be in the future, and how the Franchise system intends to penetrate that market.
The Franchisor should also be willing to discuss the future competitor that may appear on the horizon. They may not be willing to disclose their specific strategies about dealing with that eventuality – at least not without erasing your memory after the discussion. However, a general discussion about the issue should give you some solace that they have thought about their approach, and that you feel comfortable with their preparedness.
Again, if the Franchisor is not sufficiently prepared to discuss current competition, as well as future competition, then warning bells should go off.
Is The Franchise Scalable?
This issue relates to your own targets, as they all do. If you want to grow a your business to leverage the Franchise process in multiple locations, or by leveraging the results of a number of employees, or by any other criteria appropriate for the business, does the Franchisor allow for that growth? If leverage is one of your goals, and the means and market are available in the Franchise system, what is the cost of that leverage?
Some systems that provide services, won’t allow you to hire employees, while others encourage it. In the case of the systems that encourage it, you should ask about the cost of adding units in that strategy, and the training process for any new employees.
In retail environments, the leverage will come from additional locations, or physical expansion, or additional product lines, so your questions must relate to that availability, and the capital cost required to execute the strategy.
Other related questions include asking about geographic restrictions to where you can build business. Again, some Franchises have geographic restrictions, while others allow you to build business without reference to the map.
The important thing is to ask the questions, and understand the answers to make sure your future growth goals can be met by the system you are assessing.
What Are The Franchisor’s Growth Plans?
You may think that a Franchisor’s growth plans are not important to you once you become a Franchisee. However, there are a number of factors that illustrate that a Franchisor that has continuing growth plans will increase the value of your investment.
The opposite of growth would be shrinkage. That doesn’t sound too good does it? The middle point would be stagnation. That’s not too attractive either. So why is growth important?
One important factor is related to the penetration goal stated above. If there is room to penetrate, and the Franchisor doesn’t have strategies to meet that market, guess want will happen. Yep, competitors will penetrate, and through their growth strategies, they might eat some of your lunch. It is logically better for you that the Franchisor has growth strategies that will address that market need, and grow value in the Franchise system, as opposed to rolling out the welcome mat for competitors.
A second factor is that a normal phenomenon in Franchising is that each Franchise that is added to the system, and each new customer that is added to the system, and each new employee that is added to the system, will increase the value of the brand. Volume carries clout in price negotiation. Messages are carried by more lips. More signs, more transactions, more bank deposits, more customers, more vendors – it all translates to increased brand recognition. Increased brand recognition should translate to more business for each Franchise.
In addition, growth strategies will generally drive up the Franchise Fee. That means that if you pay $2 as a Franchise Fee, and growth strategies drive the Franchise Fee up to $5, then that becomes the base value for your Franchise because the market will pay that price. That’s a nice return on investment if it’s achieved over a reasonable timeframe, which of course is driven by the Franchisor’s growth strategies.
O.K., so there are lots of good reasons that growth is important as opposed to shrinkage or stagnation. However, you must also feel comfortable that the strategy is sensible. That’s why you need to ask the questions, and you should expect well thought out answers that makes sense to you.
What Exit Strategies Are Available?
There are many factors that should come into your analysis before becoming a Franchisee. The folly often lies in not considering this part of the equation at the very time that you are considering entry into the Franchise in the first place. That’s exactly the time when you need to give significant consideration to the value of the asset that can be created. Ongoing profitability, cashflow, and emotional fulfillment, are all important criteria in the process of making an informed business decision about becoming a Franchisee. But then so is the growth of the asset value you create, along with the ease of realizing that value at the time you intend to exit.
You need to discuss these issues with the Franchisor as you consider the Franchise opportunity. If the Franchisor isn’t willing to discuss these issues, then it may mean that there isn’t a solid basis for asset growth, and current profitability is the only consideration. You have to determine how important this particular part of the equation is for you. The important part is to ask the question so you can assess the response in terms of your own goals and dreams.
There are many more questions that must be asked of the Franchisor. These five questions will give you a good basis to understand the general strategies and thoughts of the Franchisor. That way you can determine if you have unified thinking, and if that answer is affirmative, then you can craft more specific questions about the system.
To receive a free copy of an E-Book titled ‘Franchise Opportunity – Making The Right Decision’ by Dennis Schooley, email that request to corp@schooleymitchell.com.
Search Results Archives: August 2010
Franchise Opportunity – 5 Questions To Ask About The Franchise
Things About Making Best Ecommerce Websites
Why an ecommerce website is different than an ordinary website? Well, when an ecommerce website is created, the owner has only one thing in mind—to generate maximum profit! Because the sole purpose of an ecommerce website is nothing but making profit. This is a virtual market place and all the transactions take place online. On the other hand, when the other sites are being built, there are not much concerns because most of them are sought after by the surfers themselves and they are information sites where the visitor just come in and seek for information. In the case of ecommerce website too, the visitors come; however, with a lot of expectations. They want the ultimate, quality, information and explanations, best customer services, and more over trust! If you can give these factors in a good amount to these visitors, you easily find the success.
A lot of ecommerce websites are coming up but all of them are not particularly successful.
For finding the desired result, one needs to play a smart game! The truth is that several things add to the success of an online business. This is the reason why a lot of emphasize should be made to the building up of your website. First of all, you need to have an ecommerce website which attracts your potential customer and for that you should have the right ecommerce website design. A good web design is going to pull the visitors to your website and then it is your right ecommerce web solution which is going to stick them to your website. As you know, there are millions of websites out there and no visitor has patients to stay with a website which has some dull, outdated features and unfriendly navigation!
The web owner too should have an idea about the entire process though you are approaching an ecommerce website designing company. You can always do that; however, you too should have a complete idea of your website like how it should look like, and how user-friendly the website should be. Well, sometimes, when you visit an ecommerce website, you find that a number of images and information in the opening page itself which makes it so cluttered. This complexity and untidiness often cause distaste in the visitors. Therefore, make sure you have made it tidy yet informative, especially about your product. When a customer visit an ecommerce website, he or she will be curious about to know more about the products. Therefore, an elaborative description about your product is not just a need; it’s a huge necessity to hook the customers to your website.
The next thing is obviously easy navigation. Don’t make it complicated, use the simplest of simple methods to guide your visitors to your product and make them feel good and thereby buy your products. And the last but not least, the trust and security! This is one thing they all look for. You should have authentic ways for online money transactions and keep your customers pleased. These are some very important factors that cannot be overlooked when you plan to build up a business online. Appropriate web design and ecommerce solution is the only answer for you and for that it is always better to go for a professional help and you can find out the best ecommerce website development company out there easily.
Posters and Color Offset Prints
Posters are the most staple printed materials that you can use in your marketing and advertising campaigns. time and again they have proven their worth and are very effective when you need o capture an audience’s attention and interest.
Posters are an indispensable tool that occupies many public and open spaces. Just look at walls, in the stands and on windows. Posters come in a variety of different shapes and sizes. They also come in different sizes: big or small. Some are printed on one side while others are printed on both. They work best as color offset prints that have vibrant colors, great resolution and attract as much attention as possible.
All kinds of business can use posters in different fashion – in large format for promotion, in standard sizes for trade shows. They use them as motivation posters and advertisements. With its different uses, posters are very practical in a number of ways.
Color offset prints mean more prints at lesser costs
Color offset prints are your best bet when in comes to bulk printing orders. They can handle printing large amount of orders at a very fast turn around. Not only that, the more you order, the lesser the print cost per printed piece becomes. This means, you don’t double what you are paying for 500 posters just to avail of 1000 posters. Only a fraction of the cost is added to make twice as much posters since bulk of your printing cost is placed on the production of plates.
They are versatile materials
You can use your poster in a variety of ways and you can print them in different ways also. die cutting allows you to form them into any shape that you can think of. You can also print in different sizes. Some printers even allow you to print up to 60 x 100 inches.
You can also use the different paper stocks available. The stocks many printers use involve 100 lb. Gloss Text and 100 lb. Gloss Cover both paper stocks are brought white and are of optimum quality to give you the best colors – allowing you to have eye catching posters for your product promotion or service promotion.
How to make posters effective:
o Never look at the size of the poster. Do not think that the bigger the poster, the better or more effective it is. Contrary to popular belief, size does not matter. The message is what matters. It should be clear and not cluttered.
o Edit anything that will not help you in conveying your message. It should be prominent and clear – the headlines, the dates, the venue and such.
o Always use a single message for every poster. One message is much mire effective thatn trying to convey many messages in one poster.
o Your company logo should stick out and be prominent so that the people remember who you are and what you do. That’s the main point of your poster right? To make your products, services and company known.
These are just some of the possibilities that you can explore with color offset printing your posters. Experiment different options and create a poster design that is uniquely your own.
Buy a Domain – Earn money with domain names
Domain names are the first virtual “real estate”. Are considered valuable assets today. To get an idea of their getting the kind of “Real Estate”, we talk, check out this decade, a domain name for sale:
• Business.com – 7.5 million U.S. dollars
• AsSeenOnTV.com – 5.1 million U.S. dollars
• Altavista.com – $ 3.3 million, then sold to Overture Services, 107 million dollars!
• Wine.com – 2.9 million U.S. dollars
• Autos.com – 2.2 millionMillions of euros
• Commerce.com – $ 180,000
the list goes on …
As you can see, we’re talking a lot of money. Let’s see how we raise money by selling domains.
In order to sell a domain name, it is obvious that somewhere. Sedo is an excellent way of marketing your domain. They will not only provide free parking for your domain, but also offer to list their domains for sale free! You can enter your asking price forevery area of the park, and a brief description of the area. It is a great way to sell your domain quickly and at the same time, earn money from clicks waiting for the right offer.
Remember, always an end user, which is always a company or a company that uses the domain to sell to build your business.
Sometimes it is faced with a situation in which a man for a domain that it is itself and what it will offerBuy your domain for a certain amount of Nice make you happy, then sell it to an end user in a mass 46 times the quantity sold.
So my advice is, if not desperate and really need money, your not up to finding the right buyer.
But do not be fooled, sometimes blank, you will not find any user in your domain name ridiculous and a wise decision, the man sells the firstoffer.
– Always ask for an assessment before making a sale. You can request feedback from domain-related forums like NamePros. You can open a new thread and ask in your area. But if you want to know the exact price of the name only to a company whose business is to evaluate the search area. We pay X amount of cash and gain obtain a professional assessment of domain names.
– If your domain name is aridiculously large. I recommend you add the domain names of stars, Sedo, of course (not free), but certainly the attention and the offer you want for your domain.
– It is recommended that the final sale transaction through a business domain, such as the housing provides the security of the transaction.
http://www.buyadomain.pannipa.com/2009/12/earn-money-with-domain-names/
