Archive for the ‘On Franchising’ Category

You fed up working for others and have called it quit. With your cash in hand, you set your sight focused on a mission: being a successful entrepreneur.

You revved up, and despite of all the worries and negative comments on you quitting your job, you are start looking for a business to invest in, simply because you feel you don’t have enough experience in starting out yourself. One logical choice you have found: franchising.

You are excited, ready to take the most promising franchise today. You learned that it only took you $20,000 to start with $2,000 projected net profit – 10 months to ROI?…

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Franchise and business opportunities, by all means, are different in nature. Yet, so many people have mistaken one with another.

Sadly, the business owners themselves also inaccurately believe that their business opportunities (often referred as BO) are franchises. To make matter worse, potential investors also believe on their claims.

Let us set things straight once and for all.

The difference between a franchise and a business opportunity (BO)

The main difference is the fee being charged for the investors who are interested in the business proposal. Some BO owners charge a fee that resembles a franchise fee – Some called the fee “license fee” and some others “management fee.” It is not a word-game.…

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Some enter franchising with a bit too much hope – They dream of cutting their way into entrepreneurship and, since they buy a proven system, success is guaranteed and being filthy rich is on the surest path. The story ends happily ever after.

Unfortunately, if you were one of those people, I have to slap you to wake you from your day dream.

I have mentioned in my previous article that if you are not ready, you better postpone your intention to enter the world of franchising.

Being not ready includes a misconception about franchising and a false hope in becoming rich easily through franchising.

Why owning franchise units will not make you filthy rich

Owning one or multiple franchise units can lead you to financial independence that all entrepreneurs are dreaming of.…

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If you are interested in franchise opportunities, here is a question for you to ponder: “Regardless of how much money you have to invest in franchise unit(s), which franchise type you choose: Low-investment or high-investment one?”

To dig deeper into that question, please consider the following scenario:

Suppose you have $100,000 to invest in franchises. Will you invest in 10 franchise units at $10,000 each or 1 franchise unit at $100,000?

I have actually asked this about two years ago on Yahoo! Answers with no interesting answer – Unfortunately, I can not find the link to my question to share you. One thing for sure, almost all left ambiguous answers that raised even more questions; something like, “That depends on your vision about your entrepreneurial career” – The answer is less than adequate to satisfy my curiosity.…

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Can you get rich with franchising? Yes. Just like anything else in business world, you can achieve your financial milestones well if you do the right thing.

Being a franchisee for several years makes me realises that not all franchisees are born or created equal – The personal traits of the franchisees govern how well they can work with a certain group of franchises.

Those being said, there are general qualities that each and every franchisee has (and should acquire).

Rich franchisee poor franchisee

Inspired by the work or Robert Kiyosaki – Rich Dad Poor Dad, I coin this term: Rich Franchisee poor franchisee

Rich franchisees are those who find the right franchise to invest in and bear qualities that can succeed them in every franchise opportunity well-suited to their personal traits.…

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There are certain criteria that are well-sought after by a franchisor in accepting an investor proposal to be a franchisee – And no, it is not always about how much money you have to fund the franchise unit purchase.

Your ability to fund the purchase of a franchise unit is one of the technical criteria, along with some others investment-related issues, such as your funding methods, your net worth, financial track record, and such. However, there are other criteria to help a franchisor consider a franchisee, beyond how much money you have to buy the franchise, such as the followings:

The ability to follow rules

Key to franchising is a well-proven system, and the system works based on a set of rules agreed upon by franchisees.…

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Franchising offers an opportunity for a budding entrepreneur to shortcut into entrepreneurship. Unfortunately, franchising is not for every entrepreneur.

Not all entrepreneurs can be a good franchisee – This is a fact you and I can not deny. Forcing your way into franchising can only eventually result in two exits: Struggling franchise units and going out of business.

Why entrepreneurs struggle as franchisees

By nature, born entrepreneurs are creative but having difficulty in following rules, as they think rules were made to limit their creativity. They like to play with their own set of rules and love to find creative ways to solve problems.…

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