Franchise For Sale

Franchising is a method of conducting business, a whole new concept of enterprise. It is an essential tool for already established and successful businesses to expand increase their market presence and reach far off markets quickly with little expense.

Franchise has its roots in the French language, meaning freedom or honesty. A business that conducts itself under a franchising agreement is named a Franchise.

Franchisees, though different, are mainly of three types

  • Distributorships: Such as auto dealerships, electronic goods dealerships etc. The parent company gives the right to the franchise to sell the company's product, provide after sales service and be identified only by the company's brand name.
  • Trademark/ Brand name licensing: Franchisees use the parent company's brand name along with its own business eg. Beverages like Coca-Cola.
  • Business Format franchises: this is the usually understood franchise. Franchisees acquire the right to sell the franchisers goods and services using its brand name and business methods.

Franchisees pay an initial fee and subsequent percentage of profits to the Franchiser throughout the period of the contract. Any deviation from the agreement of business nullifies the contract. The franchiser provides initial support and ongoing training, their business methods and marketing strategies. The franchise must meet quality control and maintain the standard of the parent company.

Tim and Myra Pellem are franchisees of WSI the world's leading Internet Service Provider with 1500 franchises. The Pellem's operate their franchise in Naarden, Netherlands and have bountiful praise for their parent company for the support and training provided which has enabled them to become successful in a short period. As Tim says " You don't need a technical background to be successful in WSI's world class consulting environment, WSI's proven system is all you need."

Franchise is a proven method of doing business. It saves one on the initial problems and start-up hassles, providing an already viable, profitable market niche. With tested marketing skills and brand name recognition most franchisees get a headstart in business and profitable returns earlier than if they would if they were establishing a new business.

The Uniform Franchise Offer Circular (UFOC): allows prospective franchisees to obtain information about a particular franchiser. The main purpose is to provide information about a franchise to the public. It provides the necessary regulation to govern franchisees. The format allows the franchiser to provide 23 categories of information to the franchisee before the contract is signed. The information is usually about business practices, principals, audited financial statements and the like.

Franchise Business for Sale

If you would like to start a business, a better option is to buy a business for sale, still better a franchise business for sale. An already established franchise business requires less initial input, the cash flow is quicker and more importantly you get an established customer base. Since the infrastructure is already in place, financing is easily available to expand and improve.

Some factors do have to be considered when buying a business. Due Diligence to check into a business is essential. A business's practices its commitment and its trustworthiness. The services of an accountant, a lawyer, and a banker would be helpful. An accountant can check balance sheets, financial statements, develop a business plan based on your budget and assess earnings. Its is a good idea to check the books for the past three years, it gives you a fair idea of how the business is progressing or not. A simple test to apply is the 'EBITDA' that is earnings before interest, taxes, depreciation and amortization.

Franchise Business Opportunities

To select a successful franchise business among the countless businesses in the market may seem difficult but a little research can often lead to a profitable investment. Nearly 900 new franchise concepts in 75 different industries have been launched in the US in the past 3 years. You can choose to own a franchise as a side business or a work at home franchise. Most franchises, which operate from home, are low cost and low overhead, providing good returns. For instance the WSI franchise requires a fairly recent computer with a fast Internet connection only. Franchisees of education and tutoring also require little investment and a fast PC.

You can also utilize the services of a franchise consultant, who would narrow the choice of a franchise keeping in mind your budget and aptitude.

Of the thousands of franchise opportunities the apparel and clothing business, sports wear and equipment, food and beverages, automobiles and the children's market are the tried and tested profitable businesses.

International Franchise Opportunities

Shrinking global boundaries and the opening of markets in developing countries has led top brands in all sectors to expand and tap into international markets. Vastly underrated but with a growing economy which increases an average persons spending power, these markets provide fertile grounds for brand name franchisees to flourish. It is estimated that nearly 500 top companies franchise internationally. Most foreign companies like Nike, Reebok, Macdonald, KFC, Levi's and beauty products of Revlon, Avon are visible internationally. The rules and regulations governing international franchisees are taken care of by the World Franchising Council, of which many countries are members.