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 Posté le: Lun Sep 30, 2013 3:45 pm Sujet du message: Ask the experts: What do I need to know if I want |
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{Ask the experts: What do I need to know if I want to buy a franchise,[url=http://www.moncler-sale.org]moncler on sale[/url]?}
Bruce Fox, Robin Chakrabarti and Neil HamiltonTue Jul 9, 2013 12:01am PSTBruce Fox: Chief operation officer and VP of development, Brown's Restaurant GroupBuying a franchise can be easy and complex: easy because there is an established system or brand that has already been test-driven; complex because of the inherent responsibility to understand the strengths and weaknesses of each franchise.Franchising as a business model is more akin to leasing than a purchase. You don't actually own it. You acquire the rights to use a brand in a certain place,[url=http://www.moncler-sale.org]discount moncler jackets[/url], for a certain time, under a certain set of rules,[url=http://www.moncler-sale.org]moncler down jackets[/url], and you pay for these rights. The franchiser owns the brand. You deliver the service or product. You need to determine the demand for the product or service,[url=http://www.moncler-sale.org]moncler down jackets[/url], and must evaluate the reputation and success rate for the brand. Ask how long the franchiser has been in business. Do they "hard sell" to prospects? Be cautious if they do.Ask how much training will be provided, and if they provide ongoing support. Can you be absent from the business periodically or must you always be on site?Financially, is the franchiser transparent about performance? Will you get access to existing franchisees who will share their satisfaction or discontent? What amount of capital is required to set up the business (ask for detailed recent development cost summaries) and what sort of margin is generated after royalties are paid? Are you required to contribute to marketing and advertising costs, and will you have any control over how it is spent?Legally, a franchise agreement gives the franchiser and the franchisee clearly defined rights and obligations to each other. Be sure to engage the services of legal counsel that explicitly understands franchise arrangements,[url=http://www.moncler-sale.org]moncler outlet[/url], because not all lawyers have such expertise. Do not expect to negotiate the franchise agreement.Finally, ask yourself if you really love the business. Passion makes it all work. The rest is just an access pass.Robin Chakrabarti: Founding partner, RAMMP Hospitality Brands Inc.Without getting too existential, the most important thing you need to know if you want to buy a franchise is yourself: your level of passion for the industry, the brand and your future customer.Before you spend time wading into the technical details of franchise ownership, you must first visualize yourself being loud and proud about your franchise one year,[url=http://www.moncler-sale.org]discount moncler jackets[/url], five years, 20 years from today. Business ownership, whether you are creating your own brand or owning a franchise, is a rewarding but demanding undertaking. Your passion for your business is what will sustain you as you overcome the challenges of owning a business.Another critical aspect is the franchiser-franchisee relationship. Think of the franchiser as your spouse and envision dealing with your spouse through trials and tribulations over a long time. Your spouse should be supportive, should want your input and should be willing to support you over the long haul. Get to know the franchiser and the personalities. Do they have a track record of success? Are they as passionate as you are? Do you share values? Are they innovative? Are they hiring great people? What is their long-term vision?Transitioning to cold hard cash, you must know and understand the financial levers of your business. How many customers visit and at what average spend per visit do you break even? What are the biggest cost items and who controls them? Which expenses are variable and which are fixed? At what level of sales will you be able to provide yourself a cash return? Test your assumptions for every detail and sensitize your financial model for being both extremely successful and slow.You must recognize that even with superb franchiser support, the business is still owned by you and day-to-day decisions will rest in your hands. For most people this is the fate they want,[url=http://www.moncler-sale.org]moncler sale[/url], but before you move ahead, ensure that you really are one of those people.Neil Hamilton: Senior property adviser, Macdonald Realty Ltd.A prospective franchisee's job is much harder than the franchiser's. The franchisor is taking the money; the franchisee is giving it. And unless you own at least three franchises, you're pretty much buying yourself a job, so you must be very careful.Here are the main things to check out.•How long has the concept been around? Are the people behind it qualified,[url=http://www.moncler-sale.org]moncler sale[/url], honest, and do they check out? Do they answer all your questions and share information forthrightly? Research them online and see what kind of feedback the public provides on their concept. Any business worth buying into should have been around at least five years to be sure it has "made it." If less, how many outlets are in the chain? How many are making money? How much? How many have failed? Why?•What is the price tag and what does it buy you? What are their franchise and royalty/advertising fees? Are these aligned with industry norms? Are their stated margins aligned with industry norms? Do existing franchisees back this up? What is the facility cost and is the build-out marked up? Do they help you negotiate the space lease? Who is on the head lease?•Have conversations/visits with as many existing franchisees as possible, and not necessarily the ones the franchiser steers you to. Perform "mystery shopper" exercises. Sit out in front of one or more locations for a day,[url=http://www.moncler-sale.org]moncler outlet[/url], monitor traffic,[url=http://www.moncler-sale.org]moncler on sale[/url], see how they treat their customers and watch customers' reactions to what they bought.•Have a good franchise lawyer. This is vitally important. All franchise agreements are skewed hugely in favour of the franchiser. How does this one stack up?•Lastly, after your extensive research, does this concept appear to have staying power in the marketplace for some time to come? Is it on the cutting edge of its category or on the trailing edge? And most of all – would you be comfortable doing this business?Tags: law, periodical, Macdonald Realty Ltd., advertising, entrepreneur
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