Benefits and Responsibilities of Franchise Ownership
We’ve all seen so-called “reality TV” shows like ‘Kitchen Nightmares,’ where a tearful or even angry restauranteur is dressed down over the bad choices they have made on behalf of their business. Typically, their menu was poorly conceived, or the produce they used was far from fresh.
Sometimes, the restaurant owner did seemingly everything right, except understand that they were too under-capitalized to make it through the challenges of those tough early years – challenges that can shutter a majority of new businesses if they try to face them alone.
That’s why many business owners are turning to the structure of an established franchise to help make their own business venture a profitable one. Franchise ownership is a best of both worlds situation: You become your own boss, without having to reinvent the wheel with risky financial choices and outlay.
A franchise owner (“franchisee”) enjoys many unique benefits by way of their partnership with an established franchise company (“franchisor”). Typically, the franchisor will help the franchisee make good decisions even at the earliest stages, from helping to select promising, high-traffic locations, to sourcing good contractors if construction is required.
A franchisee goes on to have the benefit of the leveraged power of the franchisor, and existing partnerships with vendors, to make sure that inventory is delivered to their door quickly and inexpensively. A franchisee makes use of the company’s employee training techniques, and the company’s products and pricing, all highly refined and vetted as a blueprint for success.
But perhaps the single-most visible benefit of partnering with a franchise is through its branding and advertising. With the use of an established name comes the pre-existing consumer goodwill tied to that name. Customers already know what to expect from a business, and they already know that they trust it and like it. Delivering a satisfactory customer experience becomes a far simpler matter of presenting a uniform experience in keeping with the quality of the products and services customers are already familiar with.
Of course, owning a franchise business is not a free ride. More often than not, there is a franchise agreement in place between the franchisee and franchisor that lays out the nature of the relationship between the two parties. Among other requirements, such as detailed reporting, that agreement will contain a description of the fees that must be paid to the franchisor in exchange for the use of its vast resources and brand.
These fees must be paid diligently, on schedule, to keep the franchise agreement intact and renewable. Therefore, a franchise owner must be well-capitalized not just when they first start or purchase the business, but as the business matures as well. The franchise agreement must be kept out of termination to maintain that rich flow of resources from franchisor to franchisee, and keep the business profitable.
At Blue Coast Savings Consultants we are here to help you with your business every step of the way. We are delighted to learn about your growing interest in the benefits of business ownership, and would be happy to put our industry expertise to work for you.
Blue Coast Savings Consultants is not a franchise, it is a business opportunity. There are some important differences. You can learn more about these differences on our Frequently Asked Questions page.
If you are looking to start a new business this year we hope you will consider becoming a Blue Coast Savings Consultant. We offer a turn-key business opportunity much like that of a franchise except that there are no ongoing royalties to be paid and there is a low initial licensing fee. Learn more about what’s included and the investment required when you become a Blue Coast Savings Consultant.
At Blue Coast we also have proven marketing strategies and numerous tools and programs to help you succeed as a Business Savings Consultant. View our webinar to learn more.