If you are a start-up entrepreneur looking for a business opportunity and are wondering on how to start a business then there are many opportunities for you in your own locality. You can search for a business that is for sale in your own city. You can invest in this business and then gain profits. There are many profitable franchise opportunities and many businesses for sale all over the world.
Franchising is very popular these days and is a very good idea for starting a business for those people who are new to this field. This is because in franchising the franchisor normally gives training and advice to the franchisee and guides him or her on how to do the business right. Resources are also easily provided and the brand name further promises that the customers will certainly come. Some franchises of renowned brands already have a customer base so profitability is guaranteed.
So what exactly is a franchise?
Franchising:
Franchising is the method of having the right of using a business’s successful brand and business model for a period of time which is decided. For the franchiser, having a franchise is better alternative than to build a chain of store for distribution of goods. This avoids the liability and the investment of a chain. However, the franchisor’s success is depending upon the successes of all the franchisees.
The franchisor:
The franchisor is basically and in distribution terms, a supplier who is allowing a franchisee, or an operator to use his trademark and to distribute the goods of the supplier. For return, there is fee to be paid by the operator to the supplier.
The franchisee:
The franchisee in this process has a greater incentive he or she could have had as a direct employee because in this process he or she directly has a stake in the business.
Payments made to franchisor:
There are three important payments which are made to the franchisor
Royalty:
A royalty which is given for the trademark
Reimbursement:
Reimbursement is supposed to be given for the advisory and training services which are normally given to every franchisee
A percentage of sales:
A percentage of the sales of an individual business unit are also given to the franchisor.
Hence if you are a start-up entrepreneur and are looking for a good business idea then franchising is certainly the way to go to.
