If you wish to invest, but are not ready to build a business from scratch, you can buy a franchise. Franchising allows you to reduce the risk of bankruptcy of the new enterprise and to reduce the initial investment. But before buy a franchise, you need to consider all its advantages and disadvantages, and only then make a decision. Pros franchising: making the decision to buy a franchise, you get: the ability to provide comprehensive support the franchisor; possible assistance the franchisor in the access to credit and commodity cash resources, the ability to do business under a recognizable trademark or trade name, the ability to use the results of promotional activities, scientific research and marketing studies, conducted by the franchisor, the possibility of acquiring fixed assets through leasing from the franchisor or its residual value. Ben Horowitz: the source for more info. As Franchising is a program that includes assistance in establishing and developing business, advertising, brand, manufacturing and marketing of technology, staff training, with its purchase you decide many organizational, production and marketing issues.
Franchisor supports you, helps you to start, provides advice and sets standards. Therefore, the decision to buy a franchise to develop their own business can significantly reduce the risk of bankruptcy. Thus, according to statistics, 85% of the newly formed company ceases operations in the first five years, and among those working on franchising – only 14%. Disadvantages of franchising: franchisor exercising control, limiting your independence in the conduct of business, the regular payment of royalties, fees for services provided by the franchisor, and the dependence of your position in the market from the actions of franchisor. Making a contract to buy a franchise, you should consider further the legal side of the issue: The contract must be correctly identified transferable rights, thus avoiding the purchase of unregistered trademark, trademark expiring or which are litigation. The contract must be used terminology (especially for transferring the contract from a foreign language) relevant legal concepts of Russian law.
Should be thoroughly acquainted with the activity data and the franchisor's financial performance network. You need to check the validity of the size payments under the contract to reduce operating costs and the payback period for your project. The contract must accurately define the rights and obligations of the parties, the terms of his termination. As you can see, choosing and buying a franchise – a complex and laborious process. Necessary to analyze the many legal and financial aspects. You can buy a franchise independently, or seek professional help Finmaga Business magazine, which will have full range of services, including counseling and legal support related to the purchase of the franchise, and franchise directory on the site will help you buy a franchise as soon as possible.