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Author Topic: How to Choose a Franchise !  (Read 153579 times)

rhina

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How to Choose a Franchise !
« on: February 12, 2006, 01:36:55 am »
I'm sharing this to all people who wish to franchise... Just to give you some ideas.;)

How To Choose A Franchise
By Janet Attard

You'd like to go into business for yourself, and believe that the best way for you to become your own boss is to buy a franchise. You know it will takes time and money to be successful, and that's OK. But which franchise should you buy? Which makes the most sense for you?

Here are some criteria that can help you make your decision:

1. What products or services would you enjoy selling?
What industries do you like, or dislike? Your best bet is to find a franchise in an industry you know at least a little bit about. All too typical is the case of the Chicago car salesman who decided to change careers and go into business for himself. He bought a basement waterproofing franchise but then found the business boring. He wanted to sell it, but sales weren't as high as he had expected they would be and he had trouble finding a buyer. He was stuck paying off the franchise fee and working at a business he didn't enjoy.

2. How much money do you have available to invest?

The amount of money you have available to invest in a franchise is an important factor. If you've only got $30,000 and the minimum investment for a specific franchise opportunity is $90,000, the opportunity isn't going to be right for you, no matter how much you like the company.

3. What's the total cost of purchase?
The franchise fee won't be your only expense. Find out what you can expect to pay for advertising, training, inventory, insurance, and all other costs in addition to the franchise fee and royalties.

4. How well established is the franchise?

How long has the franchise been in existence? Have they been in business for many years or are they brand-new? How many other franchises have they opened and where are they located?

5. How stable is the franchise?
What is the background of its officers? (Any history of litigation or bankruptcy of the franchise or its officers is supposed to be included in the disclosure document.)

6. What kind of track record does the franchise have?

Have most of their franchisees been successful? Names and addresses of franchisees in your state should be provided before you sign any contract. Call the people on the list and ask about their experiences.

7. What training is available?
Ask what training and support will be provided as part of your franchise fee. Will you get step-by-step instructions and hands-on training? What kinds of manuals and other materials will you get?

8. How close to your store can the franchisor let another franchisee set up shop?

9. Will you be required to purchase supplies or products from the parent company?
If so, compare your cost to the local retail prices of the same goods. There have been instances where the price from the franchise company for goods was higher than the price of the same goods in local retail stores. Selling anything under such conditions would be quite difficult.

10. What do the contract terms say about ownership? Can you sell out to someone else if you wish?
If you want to continue when the contract expires, will it be automatically renewed? Will you be able to convert your store into an independent operation if you should want to?

11. Determine how disputes will be handled should they arise.
Watch for clauses requiring arbitration in the franchisor's home state if it is different than yours. Should a dispute arise, you'd have to travel to that state for arbitration hearings.

12. What criteria does the franchise use in selecting franchisees? Do they do any screening? Or, do they seem more interested in getting your franchise fee?

13. Does the franchise use high-pressure sales techniques to get you to sign on the dotted line?
14. Do you like the people you are dealing with?

15. How big is the market for the franchise's products or services in your area and how much competition is there now?

Janet Attard is the author of The Home Office and Small Business Answer Book.

GerelRoa

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Re: How to Choose a Franchise !
« Reply #1 on: March 03, 2006, 10:09:15 am »
Hi,

For the more popular food franchises, I think it is also prudent to add the following:

Food Safety - How does the company deal with food safety?   Who will shoulder the cost of hospitalization/ death should any incidents of food spoilage/ food poisoning occurs.   This should give you a good gauge of how serious a company is with their social responsibility, and not just out for the money.   In the long run, how serious a company with their business is a good gauge of its sustainability.

Cheers!

Gerel Roa
FoodBytes InfoServices

GerelRoa

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Re: How to Choose a Franchise !
« Reply #2 on: March 18, 2006, 04:40:58 am »
Hello,

One of the simplest methods that I use to find out how profitable a franchise is for the long haul is this: ask the company to show you their commissary.

A commissary is the place where all the food sold in the franchise are processed, sorted, stored and documented.   How a business organizes their commissary is a good indication on the committment of the business entity to providing quality to everyone.   The more professional the commissary, the better the franchise.   A fly-by-night franchise will not even allow you to visit their commissary BEFORE you sign the contract.   They will tell you: "baka kasi may gumaya".  The truth is that almost all commissaries are made the same way and a well-made commissary will always stand out.

If you want, you can show me what the companies you are choosing are offering and maybe I can help you make a smarter decision.

Cheers!

Gerel Roa
FoodBytes InfoServices

ezembrano

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Re: How to Choose a Franchise !
« Reply #3 on: March 22, 2006, 05:14:08 am »
:) hey guys, i'm also interested in franchising too but like the others, i , too, am still testing the waters.  have seen much about the fiorgelato and interested on investing on ice cream franchise.  btw, do u guys know where i can know more about the mr. softy ice cream?
gerel, do u mind if i seek also for your advise when i get the company franchise info etc.? thanks
rhina, nice column u have there, a great help for us newbies thanks

rhina

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Re: How to Choose a Franchise !
« Reply #4 on: March 22, 2006, 08:51:00 am »
hi. ur welcome ! ;)

GerelRoa

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Re: How to Choose a Franchise !
« Reply #5 on: March 23, 2006, 03:25:08 am »
Hello ezembrano,

I'll be glad to help.

Cheers!

Gerel Roa
FoodBytes InfoServices

MixPH

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Re: How to Choose a Franchise !
« Reply #6 on: March 26, 2006, 09:22:42 pm »
:) hey guys, i'm also interested in franchising too but like the others, i , too, am still testing the waters.  have seen much about the fiorgelato and interested on investing on ice cream franchise.  btw, do u guys know where i can know more about the mr. softy ice cream?
gerel, do u mind if i seek also for your advise when i get the company franchise info etc.? thanks
rhina, nice column u have there, a great help for us newbies thanks


You can check this tips
https://entrepinoys.blogspot.com/2006/03/food-cart-business-no-franchise-fee.html

johar

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Re: How to Choose a Franchise !
« Reply #7 on: March 28, 2006, 11:00:38 am »
pls.....kindly differentiate: regional franchises & single-unit franchises



thnx! ::)

soy_rico

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Re: How to Choose a Franchise !
« Reply #8 on: April 01, 2006, 10:13:04 pm »
Hello,

One of the simplest methods that I use to find out how profitable a franchise is for the long haul is this: ask the company to show you their commissary.

A commissary is the place where all the food sold in the franchise are processed, sorted, stored and documented.   How a business organizes their commissary is a good indication on the committment of the business entity to providing quality to everyone.   The more professional the commissary, the better the franchise.   A fly-by-night franchise will not even allow you to visit their commissary BEFORE you sign the contract.   They will tell you: "baka kasi may gumaya".  The truth is that almost all commissaries are made the same way and a well-made commissary will always stand out.

If you want, you can show me what the companies you are choosing are offering and maybe I can help you make a smarter decision.

Cheers!

Gerel Roa
FoodBytes InfoServices


this is a great tip...  btw, nice meeting you last entrep night...  thanks...

maneki_neko

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Re: How to Choose a Franchise !
« Reply #9 on: April 01, 2006, 10:30:31 pm »
Hello,

One of the simplest methods that I use to find out how profitable a franchise is for the long haul is this: ask the company to show you their commissary.

A commissary is the place where all the food sold in the franchise are processed, sorted, stored and documented.   How a business organizes their commissary is a good indication on the committment of the business entity to providing quality to everyone.   The more professional the commissary, the better the franchise.   A fly-by-night franchise will not even allow you to visit their commissary BEFORE you sign the contract.   They will tell you: "baka kasi may gumaya".  The truth is that almost all commissaries are made the same way and a well-made commissary will always stand out.

If you want, you can show me what the companies you are choosing are offering and maybe I can help you make a smarter decision.

Cheers!

Gerel Roa
FoodBytes InfoServices

Pano kung nag o-outsource lang yong franchisor?  At yong mga nag o-offer ng franchise na iba't iba ang products? 

GerelRoa

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Re: How to Choose a Franchise !
« Reply #10 on: April 02, 2006, 09:19:14 am »

this is a great tip...  btw, nice meeting you last entrep night...  thanks...

Anytime.   Just e-mail me if you encounter any problems: gerelroa@gmail.com

Cheers!

Gerel Roa
FoodBytes InfoServices

GerelRoa

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Re: How to Choose a Franchise !
« Reply #11 on: April 02, 2006, 10:06:35 am »

Pano kung nag o-outsource lang yong franchisor?  At yong mga nag o-offer ng franchise na iba't iba ang products? 

Hello,

If the franchisor is outsourcing, you can also check their sources.   Part of the franchise agreement should be full disclosure of suppliers under a confidentiality agreement.   Part of the responsibility of the franchisor is to provide quality assurance from their suppliers and set-up a checking system.

If the franchisor is offering different products and they are not the ones producing the products, then it is the same thing, the franchisor should set-up a good quality control system to ensure quality.

This is specially true to the food industry since we are not just after quality, but a lot of safety issues as well.   Imagine having a foodcart franchise that is profitable.   What if a customer suddenly becomes ill?   If the illness is true then the moral and legal obligation comes up the line from the seller to the franchisee to the franchisor and to the suppliers.   If for some chance that you did nothing to ensure the safety of your customers, then you are liable.   If you did not check what the franchisor is giving you, then you are also liable.

On the other hand, if the customer is faking the illness, how will you prove that you were not negligent in ensuring food safety?   Did you have an SSOP?   An HACCP plan?   A simple documentation plan?   An audit to ensure staff performance?   If not, you are going to end up spending more on legal fees than in franchise fees!

In the end, it all boils down to what the franchisor can offer the franchisee and how much responsibility each is willing to take.

Cheers!

Gerel Roa
FoodBytes InfoServices

Pinoy Networker

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Re: How to Choose a Franchise !
« Reply #12 on: April 06, 2006, 08:33:45 am »
Did you have an SSOP?   An HACCP plan?

Pardon the ignorance sir but... what do SSOP and HACCP stand for?  SSOP = Safety SOP?

Just wanted to learn.  Tnx.
 :)

GerelRoa

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Re: How to Choose a Franchise !
« Reply #13 on: April 06, 2006, 12:15:17 pm »
Did you have an SSOP?   An HACCP plan?

Pardon the ignorance sir but... what do SSOP and HACCP stand for?  SSOP = Safety SOP?

Just wanted to learn.  Tnx.
 :)

Hello,

SSOP stands for Standard Sanitary Operating Procedures.   While HACCP stands for Hazard Analysis of Critical Control Points.   Both of these are food safety requirements (international) and is being pushed as part of the Food Safety Requirements to be implemented by BFAD and DTI.   Most professional franchises already have this embedded into their franchise manuals, though these are usually called with different names, depending on the institution.

If you need more info, please contact me: gerelroa@gmail.com

Cheers!

Gerel Roa
FoodBytes InfoServices

face faces

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Re: How to Choose a Franchise !
« Reply #14 on: April 06, 2006, 01:11:53 pm »
Hello,

One of the simplest methods that I use to find out how profitable a franchise is for the long haul is this: ask the company to show you their commissary.

A commissary is the place where all the food sold in the franchise are processed, sorted, stored and documented.   How a business organizes their commissary is a good indication on the committment of the business entity to providing quality to everyone.   The more professional the commissary, the better the franchise.   A fly-by-night franchise will not even allow you to visit their commissary BEFORE you sign the contract.   They will tell you: "baka kasi may gumaya".  The truth is that almost all commissaries are made the same way and a well-made commissary will always stand out.

If you want, you can show me what the companies you are choosing are offering and maybe I can help you make a smarter decision.

Cheers!

Gerel Roa
FoodBytes InfoServices



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