by Steve Strauss on September 4th, 2008
Q: I am looking at buying a franchise and the franchisor has painted a very rosy picture. What is the other side of the story?
Tom
A: First let me say that as a general rule, I like franchising as a business concept (and write for the Franchise Handbook.) The pros of buying a franchise are self-evident:
There should be less risk – ideally, the business model has been vetted and there is a successful system in place that you can follow.
There is support – a great franchisor will help you all along the way. As Ray Kroc, the... Read more »
by Carrie Hinkel on March 13th, 2008
The U.S. Department of Consumer Affairs reports that less than 5 percent of all franchises end up failing, as opposed to non-franchise companies, whose failure rate is 30 percent. Those seem like great odds until you’re a franchise owner in that 5 percent, left with an empty bank account and a worthless business. If that happens, you’ll be left wondering if there’s anything that can be done. And the answer is, maybe.
There have been many owners of failed franchises who have sued their franchiser – and won. The reason for their store or restaurant’s demise may have been because... Read more »
by Rebecca Button on December 24th, 2007
When you want to go into business for yourself, but aren’t quite sure you want to start from scratch and you can’t find an existing business that fits what you’re looking for, you might consider franchise ownership.
Purchasing a franchise involves paying an initial fee and then a percentage of profits to a franchisor. In return for your investment, you gain the use of the company’s trademark, ongoing support from the franchisor and the use the franchisor’s systems and methods of doing business including logistics, purchasing power, IT systems, and more.
Buying a franchise has several advantages over starting a... Read more »