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So, you've decided you want to be your own boss.  Why would you want to buy a franchise?

A franchise is an excellent way to be in business for yourself, but not by yourself!  You can be your own boss and still have the support from the Franchisor.

You can find out about the franchise before you buy it - you can talk with franchise executives, speak with current franchisees, etc.

You will receive ongoing support from the franchisor and other franchisees.

You will have national buying power (something very hard to achieve as an independent business).

You will have the benefit of a name brand.

The franchise already has a proven system - you just have to follow it!

Here we are - two days after an historic election.  I found the Wall Street Journal's Independent Street blog to be interesting today.  You can read their blog and see what readers think.

Click Here!

The economic impact of franchising goes beyond activities inside franchised businesses, because their purchases of products and services and the personal purchases of their owners and workers contribute to the growth of non-franchised businesses. As a result of these spillover effects, the total impact of franchising was to provide 21 million jobs (15.3% of all private-sector jobs) and $660.9 billion of payroll (12.5% of all private-sector payroll) in 2005. Output produced because of franchised businesses grew from $1.5 trillion in 2001 to more than $2.3 trillion in 2005; an average growth of 10.9% per year. In 2005, output produced because of franchised businesses accounted for 11.4% of all private-sector output.

This information was taken from the Special Report: Economic Impact of Franchising, Vol. 2 article in the March 2008 edition of Franchising World.

In an exclusive to Franchising World, Presidential candidates Barack Obama and John McCain have outlined their views on issues important to the franchise industry, the International Franchise Association (IFA) announced today.

Click here for details

21 - The percentage of sales alcoholic beverages make up for full-service restaurants. Source: National Restaurant Association

30 - The percentage of job applicants who misrepresent their working history. Source: SHRM (Society for Human Resource Managers)

52 Million - The number of slices of pizza Americans consume during the college basketball tournament, culminating with the final four in April. Source: The Christian Science Monitor

I came across this article on CNN. It discusses how slacking off sometimes can actually help you get things finished! Thought the article was very interesting. Click here to read it!

454 - The number of fast-food franchise systems in the U.S., according to FRANdata

164 - The number of franchises that can be run from your home, according to FRANdata

$500 - The amount the “average” American spends annually on fast food. Source: Survey conducted by Research International USA, seen in USA Today (6/6/2008)

I ran across an article on Entrepreneur.com and thought it would be great information for small business owners and potential small business owners and franchisees. In today’s tough economy, its always useful to find low cost ways to market your company.

Click here to read the article.

Existing Independently Owned Business – Some buyer candidates wish to avoid the “ramp-up” stage and seek a business that has already ramped up and is currently profitable. The price you have to pay is directly proportional to the earnings of the business. Existing businesses are typically priced as a multiple of cash flow. The cash flow is defined as what’s left after “necessary” business expenses have been deducted.

Some of the pitfalls you could encounter: make sure there’s documentation to support all financial information including tax returns, sales tax returns, etc. Make sure the greatest part of the revenue is not derived from only 1-2 customers. If so, how will you make sure to keep those accounts? Research the industry and competition. Check for market trends and the possibility for expansion. Make sure the seller has adequate equipment and it’s all in working order.

If you want to get into business for yourself, you can buy a new franchise, buy an existing franchise business, you can buy an independent existing business, or you can start a new independent business. Over the next few days I am going to go over some of the pros and cons of each. Today we will start with a new franchise.

Many people who haven’t owned a business before gravitate to a franchise because of the training, the marketing assistance, the assistance of the franchisor and other franchisees and the BRAND. The concept is typically proven because “X number” of franchisees are using the model everyday. It is less risky than starting your own business or buying an existing business. Who will you call if something goes wrong in a start-up or an existing business after the transition period when the seller has moved on to something else?

Let’s face it…you will make mistakes. A franchise will possibly lessen the number of mistakes because the learning curve has been diminished. As the franchisor works to expand their brand, they strive for the right fit in franchisees so that the franchisees validate well when contacted by “prospective franchisees”. Therefore, the franchisor has difficulty selling franchises without “happy” franchisees. Will 100% of the franchisees be happy? Of course not, because some will not be following the system and perhaps have found out they are not a good fit for this particular franchise concept. The other common reason for unhappy franchisees is the franchisee going into the business undercapitalized. Franchisors will tell you to plan for 6-12 months of working capital. Invariably, some people will think they can make it work in 3-6 months. Tough to do.

I ran across an interesting article posted on Newsday.com. Customer service is definitely key for small businesses. It is the way small businesses can differentiate themselves and compete with larger competitors.

Click here for the details.

1. The franchisor makes all the money
   This is a common misconception. Yes, Franchisors do charge an up front franchise fee. Yes, they also charge an ongoing royalty payment. But most of this money is invested in you, your training, and brand awareness nationally and in your market. The franchise fee you pay gives you the right to the Franchisor’s system. They train you in all aspects of their business. The ongoing royalty payments are used for advertising and to keep the brand in the public eye. It is in the best interest of the Franchisor to make sure that Franchisees are profitable and happy. If Franchisees are unhappy, it will be very hard for the Franchisor to sell more franchise territories.
    
2. Franchise businesses are too expensive
   Aside from the initial franchise fee (which provides you with thorough training on all aspects of the business you are buying), franchised businesses cost the same to start as independent businesses. This is where your research comes in. Choose a franchise model that you can afford. They range from a couple thousand dollars up to a half million or more depending on the type of franchise and the industry. 
    
3. I can’t wait 2-3 years to make money
   You may not have to wait 2-3 years to make money. Research – Research – Research. When you are deciding which franchise you want to purchase, call existing franchisees…ask them if they are profitable and if so, how long it took them to start making money. 
    
4. I am not interested in auto or food
   Great! You don’t have to be interested in auto or food to find a right fit in franchising. There are over 5,000 franchise opportunities in 80 different industries. There are thousands of franchise opportunities that have absolutely nothing to do with auto or food.