Category Archives: Franchising

Franchising A Comprehensive Source For New Establishments In Business World

For ones to reach the heights in the business world we need franchising – a licensing arrangement in which a business owner, known as the “franchisor,” markets a trademarked product or service through affiliated dealers known as “franchisees.” While these franchisees own their establishments, terms of franchising agreements typically require them to share operational responsibilities with the franchisor.

Equivalent to success rates, the franchises also tend to have a higher rate of risks and can fail for any number of reasons like any other business. So therefore proper investigation is to be done before buying any franchise.

Types of Franchises:

Business Format Franchises: With this a company expands by supplying independent business owners with an established business, including its name and trademark.

Product Franchises: Here manufactures control how retail stores distribute their products. Through this kind of agreement, manufacturers allow retailers to market their products and to use their names and trademarks.

Manufacturing Franchises: Through this a franchisor grants a manufacturer the right to produce and sell goods using its name and trademark. This type of franchise is common among food and beverage companies.

Business Opportunity Ventures: Business opportunity ventures involve an independent business owner buying and distributing the products from one company.

Mid-sized franchises like restaurants, gasoline stations and trucking stations involve substantial investment and require all the attention of a business person.

Right franchise is totally based upon:

What are your interests?

Do you want to develop multiple units?

How easy it to resell your franchise and what are the restrictions or costs from the franchisor?

What days or hours you want to work?

Advantages of franchising:

Branding: The first thing Franchises offer franchisees is a strategic identity that is not only effective, it has cumulative market impact. A successful brand is one that is remembered, and Franchises have some of the most successful brand identities in the world.

Advertising: Advertising can be one of the biggest expenses for any new business and for good reason. You cant survive without effective advertising and effective advertising is expensive.

Name Recognition: People today want guarantees like never before and name/menu/brand recognition gives them that assurance.

Reputation: The reputation of the franchise is important enough, it is what breeds positive expectations that keep patrons loyal, but this benefit coupled with a built-in umbrella of legal protection is an incredible bonus and one you cannot get as an independent.

Disadvantages of franchising:

You are exposed to fraud. If you fail to investigate the background of the franchisor or youre taken in by promises of quick profits with low franchise costs, chances are, you will just find yourself holding an empty bag.

When you buy a franchise, you are not free to do your own thing. You dont have much control on the products that are to be sold, the system that should be in place and, even, the location and general look of your business establishment.

Costs may be higher than if you are going to start your own business from scratch. Other than the initial cost of acquiring the franchise, you may also pay an agreed percentage of your sales and marketing or advertising fees.

Could Franchising Be The Business For Me

Most people are familiar with franchising. For the benefit of those who are not, according to http://wikipedia.com franchising is the system of doing business wherein a franchisor licenses trademarks of a product and tested methods of doing business to a franchisee to receive payment like a percentage from gross per sales or gross profits as well as the annual fees agreed upon, as compensation for the trade secrets shared as part of the franchising agreement. Sometimes legal contracts may vary as to the terms of franchise and may not fit the definition above. Sometimes, the methods on how to do the business may not be part of the franchise or other benefits that other franchising companies give may not be available to others.

The most common franchising companies known to the public would be chain of food stores like McDonald’s which nowadays offer some franchising strategies to reach a wider consumer market. McDonald’s has become a household name since it was able to reach a wider consumer market that is not only limited to the United States and the Americas but to the rest of the world. The success behind McDonald’s becoming a household name and the one of the most known trademarks around the world is due to the system of franchising. Aside from the buildings that McDonald’s rent to the franchisee, it also has a stake on the sales of the franchise and the cost of the supplies charged to the franchisee. To help out in the quality of products and services offered in each food chain, McDonald’s sends a member from the franchisee to their Hamburger University in Oak Brook, Illinois. This is one support benefit that the franchisee would get once they franchise a restaurant for McDonald’s.

Like any business, there are advantages and disadvantages that franchising offer to anyone who wish to venture into it.

Advantages

Popular labels are widely known and are likely to sell. Popular trademarks like McDonald’s are likely to sell than a new restaurant that has not reached a market such as McDonald’s. It is selling a well known product to a consumer market which knows the product being sold.

No need to develop a new product that has not been well researched. Venturing into franchising would allow the franchisee to have access to information that the franchisor have about an existing product and put up a business in a shorter period of time.

Trainings and seminars would be provided to the franchisee about the product. It would be easier to operate and manage the business since there are available trainings and other support methods for the franchisee.

Disadvantages

High standards held by the franchisor raise costs of maintenance in the franchise. Since the standards of the franchisor would definitely be high, sometimes the cost of maintaining a franchise can escalate. Unless the materials used would be second rate and low in cost.

Development of new products might still need to be passed for approval to the franchisor. If the franchisee would like to add a product which they think would be saleable in their market range, the new product has to be approved first by the franchisor and this may take time and it would likely be rejected if it does not meet standards of the trademark.

Profit is limited since the franchisor has stake, most of the time, on the profits of the franchise. Not only does the franchisee have little control of the franchise due to many stakes that the franchisor has on the franchise, the profit of the franchise would also be split between the two. Therefore, there is a limit to how much the franchise would earn.

Even if there are several disadvantages in franchising, still there are advantages. If you think you could handle this kind of business, all I can say is, business is gambling. In any industry there are players and you might be lucky that you would be on top once and sometimes at the bottom. Get to know the game play and start playing to win the game.

Franchising Industry To The Growth Of The Philippine Economy

What made franchising a popular trend in the Philippines? Franchise businesses, such as food-cart and food-stall businesses, had gained a lot of popularity and demand in the Philippines. The reason why is because of the opportunity for Filipinos to start a successful business, while it also serves as a popular solution to poverty by the government.

Franchising Industry in the Philippines
According to the PFA, or the Philippine Franchise Association, the franchising industry of the Philippines had grown immensely since the start of small Franchising business Philippines, such as food-cart and food-stall businesses.

In a report by the PFA, the number of franchises in the country had grown from only over 50 in the 1990s, to over a thousand since 2009, and it kept growing even today.

Its growth was a major milestone in the franchise industry of the Philippines, and the government had also seen its potential as a solution to the growing problem of poverty in the Philippines. A popular application of franchise business by the government is when OFWs from Libya had fled the country to return home.

Because most of them doesn”t have any work in the Philippines, the government had gave them a free business management course on how to manage a small business, particularly managing a franchise business such as a food-cart or food-stall business.

In addition to that, another contribution that the franchise industry of the Philippines had given to its economic growth is by providing Filipinos with more jobs. According to the PFA, the growth of the franchise industry of the Philippines had created thousands of enterprises which generated hundreds of thousands of jobs, making franchising an important tool in the country”s economic growth.

Accomplishments for the Philippines
The growth of the franchise industry of the Philippines had also garnered a number of recognition for the Philippines in the world market.

According to the PFA, the growth of franchise business in the Philippines had recognized the Philippines as the “franchise hub of Asia” when it comes to the development of franchise concepts. This had also allowed entry into the international market of Filipino brands and concepts.

These and other achievements have made franchising the preferred business method for more and more entrepreneurs “” both aspiring and established.

The Dangers of Freelancing and How to Protect Yourself from Thieves, Plagiarists and Time Wasters!

Are you a freelance designer that is worried about or has been affected by thieves and plagiarists that waste your time and lose you money? If so then read on…

I hear a lot in the forums about designers that are angry because they have just been scammed. No one expects to be a victim of theft until it actually happens to them. I personally rarely have this problem as I am careful about whom I design for and always protect my work. This does not mean to say that it will not happen to me and unfortunately does happen to freelancers all the time.

Some people feel they can use freelancers and the contest forums as a free service. They will pose as a client and give a project specification with a set price. Freelance designers will submit their work and may even get responses from this so called client. They will then steal the designs, usually using the old copy and paste method. Some more bold thieves will even request the files to be sent to them before they give payment. NEVER send your completed designs to a client before payment has been confirmed as it will leave you open to scams.

Just like thieves, time wasters do not pay for your services, but they will not steal them either. They will simply give up and ignore the work submitted. More often that not what happens is a client requests a logo or template and does not like the results they are getting from the freelancers submitting their entries. They then decide to go elsewhere without selecting a winner from their posting. The client has not looked at the rules of the forums carefully and although they do not mean to cause the freelancers any problems, by ignoring entries they are significantly wasting the designers time. This has resulted in a lot of people being banned from forums and labelled as time wasters.

The final issue of plagiarism tends to be more of a problem from new freelancers who are unaware of the laws regarding protected works. In order to copy a design in part or in full you need to have some expertise of how to do so. Remember, it is one thing to draw inspiration from other freelancers designs but another to steal and copy them. Sometimes you find a new designer who has only had a few posts and may be unsure of how the freelance business works. They may find an image from Google or even from another freelancers entry and feel they can apply it to their own designs. So they use the copy and paste function, slap it into Photoshop, add some text and call it their own. Fortunately for them, most of the time a more experienced freelancer will notice this and show them the errors of their ways and they never do it again. However, some people are aware that it is wrong and do it any way. These are the real bad guys who freelancers need to protect themselves from.

Surprisingly, a lot of freelancers are not aware of the basic method I am about to show you for how to quickly, easily and effectively protect your designs. This proven method can be applied to anything from a small logo to a large template. The method is called watermarking. It is basically faded text that is placed over a design to protect it. This text blocks the image resting under it and stops potential theft by making it almost impossible to clearly copy the design without the watermarked text showing up.

How to Start Coffee Shop Businesses and Facing the Challenges of Starting a Coffee Shop

How to start coffee shop businesses is the first question which pops up when you plan to do so. Starting a coffee store is not as easy as others may think because there is a great deal of investment and planning required for the business to succeed.

About 52% of Americans drink coffee everyday and 15% of them buy at least one cup of coffee from shops daily. The average shop sells about $550K every year. This makes this type of store one of the new business ideas for young businesspeople. In the US, there are well over 15,000 coffee stores, and that does not include kiosks.

To start this business, you may consider getting a franchise. The most obvious advantage of franchising is the pre-built advertising and publicity campaign. Starting coffee shop businesses by buying a franchise can give you the expertise and support from the franchise owner. Plus, you will enjoy worry-free management of inventories, seating plans, floor plans, menus and furnishings.

However, to start coffee shop businesses thru franchising is most likely expensive. You know Tim Hortons and Starbucks? The average cost is $100K-300K. Another 10K-20K USD a year for training and plus 6%-11% of your gross sales a year.

If you want to start a coffee sstore of your own, that’s a different story then. This type of store provides a community gathering to the enjoyment for its owners – business meetings, college students and a dating couple. You can run this business if you enjoy being around people, love coffee and can survive in a multi-tasking environment. Running this business is not only a fulfilling experience but a profitable endeavor as well. There are many things you should consider though:

Location is topmost. Review where you will place your business in a local uptown, a mall, near a college campus or where there is a lot of foot traffic with provisions of drive thru.

Estimate a breakeven. Expect expenses and not so much of income at the early stage. Plus operating expenses for lease, insurance, utilities, employee salary, marketing/advertising, Internet services, etc. Then build a plan. Know how much money to invest and how much income you will get. Then start coffee shop businesses by gathering your funds and start negotiating for the lease, researching and acquiring equipment, installing paints, bars, chairs, counters and refrigeration. Starting a coffee store means you also start hiring your staff and advertising your business.

Many have long for the bustle and hustle of a shop that they own. The whirl of the milk steamer, the smell of roasted beans, the squirt of whipped cream on a just mixed mocha; what can be better than a business you most love to indulge in the first place?