Franchising as a

Business Opportunity

Advantages of Franchising

The franchisor offers

A system that works

Training and initial business set-up

On-going back up and guidance

The franchisee receives:

Benefits on a national scale

The benefits of bulk purchasing

Administration system

Advantages of Franchising

Advantages of Franchising

• The franchisee:

• Has the services of trained field staff

• Has the benefit of the use of the franchisor’s

patents and trademarks

• Has the benefit of continuous research and

development

• Being part of a franchise group can be fun

Questions for You

• Do I understand franchising?

• Am I prepared to handle the workload and

long hours?

• Do I have sufficient financial resources ?

• Do I mix well with people?

• Will I be able to handle staff?

Questions for You

• Do my family wholeheartedly support me?

• Will the business be sufficiently challenging?

• Can I accept the disciplines of a franchise

system?

• Is the franchise route the best for me?

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Questions for You

• What are the total start up requirements?

• What initial services are offered?

• What training is offered?

• Can you obtain a business plan template?

• Does the franchisor assist in launching the business?

Questions for You

• What franchise fees are charged?

• What advertising and promotional support is offered?

• Does the company have field support staff?

• Can you speak to current franchisees?

• Is the group a member of a franchise association?

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Your Homework

• Make sure you do sufficient research

• Use a lawyer and accountant that understand franchising

to advise you

• Speak to franchisees

• Develop your own business plan

• If you are ambitious and persevere you can be a success

Franchise Success Factors

• Does the franchise operate in a large growing market?

• Is the growth in the market sustainable?

• Are the margins sufficient to cover the monthly

royalty?

• Can the product demand a price premium?

• Does the franchise have access to sufficient capital?

Source: Entrepreneur Magazine

Franchise Success Factors

• Is the brand well known or does it have potential to

become a brand?

• Is there a high barrier to entry?

• Will start-up costs give you a enough return on

investment?

• Does the group have a franchise culture?

• Does the franchise have a good leader? 18

Kids - their education and activities

Seniors - services and products

Pet - related services

Fitness - related services

Environmentally friendly products and services

Healthy fast food

Franchise Success Factors

• Do the management have experience

• Number of franchises in operation

• Number of franchises closed

• Years in operation

• Good training

• On-going support

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The best franchisees are great leaders

The Franchise Package

• Franchise agreement

• Disclosure document:

• Legal name, trading name, registered office and addresses

• Franchisor directors names, address, job title and qualifications

• Experience in this business

• Auditors, bankers etc.

• Business plan

• Details of legal proceedings for debts or other

The Franchise Package

• Information about franchise

• What’s included in the franchise purchase

• Financial contributions the franchisee has to make

• List of existing franchisees

• Financial information

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Summary

• Do your research

• Is franchising right for you

• Are you prepared to work hard?

• Develop a plan

• Get professional advice

• Don’t give up