There definite is a lot of advice out there as to which franchised outlet you ought to buy. Often franchise buyers go to a store, and they see people waiting in line purchasing a product or service. If the line is long, it looks as if the franchisee is making lots of money, and all of a suddenly a light bulb goes off in their head, and they think that might be a nice franchise to buy. Of coursework, there is an issue in all of that, if the franchised outlet is selling some kind of product which is part of a fad.
All of us know that Fads and classy products come and go, however, they also know that the franchise relationship is a bit more permanent, and often the franchise term in the agreement is 10-years. What in case you bought a franchise and the fad faded, and you were stuck with a franchised outlet that wasn't making any money because people were no longer waiting in line to buy your products and services? It happens and it happens on a regular basis, and lots of franchisees have gone bankrupt due to such situations. You see, they thought they were getting in on the ground floor, and they got in at the height of the fad, and it was all downhill from there.
Still, what I'd like to speak to you about is not the franchisees-side of this equation. I'd like to speak about another topic. Yes, there's lots of articles, and lots of advice out there telling franchisees to stay away from stylish and fad type businesses. But there's not lots of articles and advice telling franchisors which categories and industries make sense for franchising, or don't. Lots of entrepreneurs think that they can alter quickly and alter, and if the fad ends they will merely jump on the bandwagon of the next newest thing.
Indeed, a small business person can do this in their original outlet, but one time a franchise organization gets sizable, it often cannot turn on a dime that quickly. Meanwhile the franchisees start having issues, start missing their royalty payments, and this hurts the franchisor's money flow. Meanwhile the franchisor cannot sell new franchises quickly to keep the game going, and a money flow crunch ensues. If your franchise technique sells a stylish product, you better make definite that it is agile and can alter quickly as that fad fades in to the future. Indeed I hope you will think about all this and think on it
All of us know that Fads and classy products come and go, however, they also know that the franchise relationship is a bit more permanent, and often the franchise term in the agreement is 10-years. What in case you bought a franchise and the fad faded, and you were stuck with a franchised outlet that wasn't making any money because people were no longer waiting in line to buy your products and services? It happens and it happens on a regular basis, and lots of franchisees have gone bankrupt due to such situations. You see, they thought they were getting in on the ground floor, and they got in at the height of the fad, and it was all downhill from there.
Still, what I'd like to speak to you about is not the franchisees-side of this equation. I'd like to speak about another topic. Yes, there's lots of articles, and lots of advice out there telling franchisees to stay away from stylish and fad type businesses. But there's not lots of articles and advice telling franchisors which categories and industries make sense for franchising, or don't. Lots of entrepreneurs think that they can alter quickly and alter, and if the fad ends they will merely jump on the bandwagon of the next newest thing.
Indeed, a small business person can do this in their original outlet, but one time a franchise organization gets sizable, it often cannot turn on a dime that quickly. Meanwhile the franchisees start having issues, start missing their royalty payments, and this hurts the franchisor's money flow. Meanwhile the franchisor cannot sell new franchises quickly to keep the game going, and a money flow crunch ensues. If your franchise technique sells a stylish product, you better make definite that it is agile and can alter quickly as that fad fades in to the future. Indeed I hope you will think about all this and think on it
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