Start Franchise Help

You are a nine-to-five worker, and are noticing that nothing is happening. “Playing by the rules” only made you tired and old.

Doing businesses had come across your mind, but with the news of businesses failing left and right, you freeze in terror.

Yet, you still find in the newspapers, in the TV and in the world wide web that there are companies offering franchising. Maybe this is the type of business for you. And you are intrigued. You ask yourself, what is franchising, anyway?

What is franchising?

Franchising is a contract where an already established company and an entity agrees to use the company’s already successful business system. The franchisor, the company that provides the business system, and the franchisee, the entity that uses the business system, go into a contract to use and capitalize on the business system.

The franchisee then expends two types of payments generally. The first one is the franchise fee, which is a one time payment, and the other is the royalty fee, which is a recurring payment, for the continuous use of the business system and advertising costs. Royalty is usually 3-10% of the gross sales.

Franchising is a mutual business relationship that gives a number of entities to share: brand recognition and a successful way of doing business.

The phrase “I am buying my franchise” is actually not correct. You are not buying the business model, you are capitalizing on it. What you will own are the tangible assets need to run the franchise like the building or equipment.

For a company to work in the franchising world, the company must have a good record of profitability and the business solution it employs is easily duplicable.

What’s so great about franchising?

For the franchisor, the business can grow and gain more chains while lessening the traditional risk and liability of doing so. It is also a great way to gain more brand recognition and reputation.

For the franchisee, they are investing in an already proven business system. Who can go wrong in a business with a 90% success rate?

Alex Dimakulangan is one of the most trusted franchising experts in the Philippines. To become a trusted franchising expert like him, you can go to his website at Franchise Philippines and read his articles about Philippine franchises.

Related posts:

1. The Definition of Franchising
2. Franchising: The Basics For Beginners
3. Franchising business vs Traditional Business
4. Business Franchising
5. Regulatory & Legal Framework – Do We Require a Franchising Law in India?
6. Preparing Your Business For Franchising Success
7. Business Franchising – Just What Should You Look For In A Franchise?
8. Things You Should Know about Business Franchising
9. Back to Fundamental: Food Patronage Through Franchising
10. Some Things To Know Concerning Low-cost Franchising Systems