To Consumers
Franchising is a wise
choice
because consumers like to
purchase goods and
services from familiar
names with reliable
standards of service and
quality. They like to deal
with businesses where the
owner is on-premise.
To Franchise Buyers
Some of the
advantages of buying a
franchise.
Low Risk - The U.S.
Commerce Department
estimates that 95% of
franchises succeed; only
25-35% of independent
businesses succeed. Why
the difference? Since a
franchise is usually
a duplicate of an already
successful business,
it should succeed.
Quicker Startup /
Higher Sales / Higher
Profit / Increased Equity
- When a person buys a
franchise he's getting
start-up support and he's
buying the "learning
curve". As an alternative,
if he were to start a
similar independent
business it would take
longer to achieve the
sales volume associated
with buying a franchise.
The trial and error stages
have already been done by
the franchisor and as a
result, profits and
business equity are built
faster.
Be One's Own Boss -
Franchising allows an
individual to feel the
pride and independence of
owning his own business.
Training - The
training an individual
receives in a franchise
should help him avoid
mistakes and generate more
volume and profits.
Support / Ongoing
Assistance - Ongoing
support gives a franchise
owner quick access to help
solve problems and a
feeling of not being
alone.
Collective Buying Power
- Collective buying
power should help reduce
costs of doing business.
Regional/National
Marketing - A chain of
operating units can afford
to generate
far more exposure and
advertising than can
an independent, resulting
in higher sales volume.
System/Policies/Procedures
Already Tested And
Established -
Tested and proven systems
save development time and
help prevent mistakes.
Trademarks -
Customer awareness of the
franchise name is a
tremendous benefit.
Mutual Destiny -
The success of the
franchise owner is in the
best interest of the
franchisor.
Research And
Development - The
franchise owner can
utilized
the research and
development performed
by the franchisor. This
saves valuable time and
capital.
To Franchise Buyers
Some of the disadvantages of buying a
franchise.
In exchange for the security, training, and marketing power of the franchise trademark, you must be able and willing to give up some of your independence. If you are a person who likes to make most decisions on your own or to chart the course of your business alone, a franchise may not be right for you. As a franchise owner, you must comply with the various controls and procedures established by the franchisor. Then, too, all successful businesses require a lot of dedication and plain, hard work. You must be prepared to make that commitment.
So You Want To Own Your Own Business
Buying a franchise business is one of the many ways that you can become a business
owner. The decision to buy a franchise should not be
rushed. For such a significant decision you need to take time to
consider some important factors before you sign any purchase or
franchise agreement.
Before making the
big decision to buy a business, make sure that you are comfortable
with the:
-
The franchise concept (the business model).
-
Level of
support from the franchisor.
-
Type and size of
the business in relation to your needs, experience, financial
capacity and future plans; and
- Business
performance of any existing franchisees, company owned units
and/or agents.
Check the
Operations of the Business
Sales
-
Check monthly and
yearly sales patterns from the previous three years' financial
statements.
-
Compare sales
trends with industry trends.
-
Determine if the
business is expanding, losing sales or remaining static.
-
Identify the
business customer base and percentage of sales from new vs.
existing customers. Check to see if the company's customers will stay with the
business each time they purchase products and/or services. Is
there an indication of customer loyalty?
- Find out if
there are any local developments that may affect your ability to
grow the business in your area.
Costs
-
Identify all fixed
and variable costs.
-
Include interest
expenses if you are going to obtain financing for your new
business.
-
Examine the
costs recorded for the franchisor.
- Determine
whether you will incur similar costs as the franchisor.
Profits
-
Analyze financial
records, including balance sheets, profit and loss statements and sales records.
-
Determine whether
the business generates sufficient profit for a reasonable income.
-
Look at effects of
increased or decreased sales on your profit.
-
Compare gross
profits with industry trends.
- Ensure that
records have been kept well and comply with tax requirements.
Assets
-
Identify all asset
items that you are buying. Refer to an asset register/list, if
available.
-
Check depreciation
schedule for equipment, fixtures, fittings, etc.
-
Determine book
value, market value and replacement value of fixed assets.
-
Identify any
current leases for fixed assets.
-
Ensure equipment is
in good working condition.
- Determine if
any equipment is unnecessary for the business or obsolete.
The Franchise Agreement
Closely review the
franchise agreement and other disclosure information as well as all
the clauses in the agreement.
Buying a
Franchise
A franchise is a
type of business ownership where an individual, partnership or
company can operate a business under the trademarks of an
already-established business.
Benefits of a
franchise can include:
-
Support of the
franchisor;
-
Flow-ons from the
franchisor's advertising, buying power, established goodwill and
trademarks;
-
Use of an
already-established business name;
-
Access to the
franchisor's management systems and industry knowledge;
- Reduction of
business risk.
Some of the
drawbacks of a franchise can be:
-
Less independence
through franchisor control of management techniques and, possibly,
of supply sources and product/service range;
-
Reputation of
franchise may be affected by factors beyond the franchisee's
control;
-
Could have an
unreliable franchisor;
-
Sale of head
franchise;
- Defined and limited
geographical market.
Become a 1-800 DRYCARPET
Franchise Owner
You might want to
continue researching an
opportunity with 1-800
DRYCARPET:
-
If you are looking for a full-time, "hands-on" career
opportunity.
-
If you have a proven track record in business
leadership.
-
If you have successfully managed your personal finances.
-
If you are a results-oriented self-starter interested in
growing a business.
This might not be the
right opportunity for
you:
-
If you are seeking an investment or an equity position
in a business.
-
If you would like to diversify your franchise portfolio.
-
If you are a person
who likes to make
most decisions on
your own a franchise
may not be right for
you. As a franchise
owner, you must
comply with the
various controls and
procedures
established by the
franchisor.
Before You
Commit to Buying a Franchise
Before entering
into a franchise agreement, you should obtain the following
information:
-
A complete
description of the business.
-
The track record of
the franchisor and current motives for franchising.
-
Evidence of the
franchisor's strategic plan - where is the business heading.
-
What the franchisor
offers under the agreements, such as name, product,
reputation/goodwill, site location, advertising budget and back-up
assistance.
-
Fees involved,
including up-front capital and percentage of takings payable to
the franchisor.
-
Terms of sale of
goods supplied by the franchisor and if you can purchase from
outside the franchise network.
-
Success/failure of
other franchisees in the same business.
-
Obligations upon
termination of franchise.
-
Guidelines for sale
of the franchise.
-
A franchise
Operations Manual, if available.
- The franchise
agreement document and the period of franchise.
The Franchise
Agreement
A franchise
agreement is a written document outlining the rights and obligations
of both the franchisor and the franchisee. It is a legal contract
and binds both parties. The content of a franchise agreement will
regulate, to a certain extent, the way you operate the franchise.
Operations
Manual
The Operations
Manual details how the franchise is to be run. Every member of the
franchise operates their business according to the Operations
Manual. The Operations Manual ensures that each franchise operates
consistently under the one banner.
Information
Sources
International Franchise
Association:
Washington, D.C., 2003. [
franchise.org ]
McGrow Consulting:
Jack McBirney
U.S. Census Statistics:
U.S. Bureau of the
Census, various years.
Detailed information
regarding franchising
About us
1-800 DRYCARPET
Systems, Inc.,
is a
Delaware Corporation.
U.S. Patent and
Trademarks:
www.swedry.com/news.htm
DRYCARPET™
Team
1-800 DRYCARPET™
The LOGOS Building
3000 W. MacArthur Blvd.
Suite 520
Santa Ana, CA 92704
Contact Us:
(800) 379-2277
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of America's Preferred, Inc. All rights reserved ©1997 - 2006 America's Preferred, Inc.
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