Pros and Cons of Starting a Franchise

[SuperSport]

I was just wondering if there are any pros and cons of starting a franchise? How and where would I get all of the Money to start up, and do I need big fancy degrees to be successful? Anyone have any first hand experience?

 

Thanks for any help, as I am always looking into possibilities as to what I want to do when I grow up.

[breath.o.fresh.air]

Well, I personally don't have my own franchise, but both of my parents are independenty employed.

 

Some pros: It's yours. You can make your own hours. You don't have to report to anyone except the law/franchise regulations.

 

Cons: Work can't be left at work. If a problem arises no matter what time, etc, you have to deal with it. It's time consuming! (don't underestimate this part!!!) You have to work on payroll, know all the labour laws, etc.

 

As far as the money goes, you could get a bank loan - depending on your credit you would likely need your parents to co-sign. There are often entrepreneur help available to help you get started, etc. You'd need to see what's available in your area.

[servedcold]

Be extremely wary of franchisors, like landlords, they tend to extract their pound of flesh. IMO, it is far better and less costly to figure out what kind of business would work in your area and start it on your own rather than go the franchise route. Service businesses are generally a better bet than retail or food sales also. Best wishes.

[Jayar]

I remember one thing from our franchising unit in Marketing 101... And that is that the ONLY ones who benefit from Franchising are the franchisors (the ones who own the NAME). It was highly suggested to start your own company, and then turn it into a franchise (I have known a few people to do this, actually...) and THAT is where the money is in franchising. That's all I remember about that.

[BeStrongBeHappy]

most franchises require a lot of money to buy into... anywhere from $50K to millions... lots of them also require the person buying in to have a certain net worth before they consider letting you buy a franchise from them... they don't want you opening a McDonalds that fails in a short time due to lack of capital.

 

unless you have business experience and lots of money, it is better to try to start your own small business rather than buying a franchise.

 

there is lot of online information on how to start your own business. it usually is best to keep your job and start your own business on the side and try to build it up and see how it goes. 3 out of 4 business do fail, so you need to get the experience and build up to it so you don't cause yourself financial trouble.

 

do some online research on

[RayKay]

They are a tough way to actually MAKE money - you put lots into it money and time-wise but have very, very little freedom with it once you are in; and you are in a contract that is usually in their favour (heavily). It is ultimately THEY whom profit, not you. And you are bound to that contract.

 

For Tim Hortons up here for example (which is HUGELY successful); they pick YOU, they tell you where the place (and you) are going to go (even if it means relocating accross country) and it requires a long training process and that you are there basically 24/7. Not all are this intense, but beware of what you are getting into and READ everything VERY carefully.

[Ampire]

It depends...My ex's parents own 2 tim hortons stores....they work about 20 hours a week each....and they make about 500,000 a year personal income.....the stores themselves make about 2 mill a year....It costs alot to buy into, but if you can, then there is benefit.....

[Ampire]

They are a tough way to actually MAKE money - you put lots into it money and time-wise but have very, very little freedom with it once you are in; and you are in a contract that is usually in their favour (heavily). It is ultimately THEY whom profit, not you. And you are bound to that contract.

 

For Tim Hortons up here for example (which is HUGELY successful); they pick YOU, they tell you where the place (and you) are going to go (even if it means relocating accross country) and it requires a long training process and that you are there basically 24/7. Not all are this intense, but beware of what you are getting into and READ everything VERY carefully.

 

and you are right, they pick the locations and pick someone with a bid to have that location.....

 

but at the same time....if your willing to re-locate somewhere for work, then its possible....there is so much money in tim hortons....once you know what you are doing...."the long training process" you sit on your ass for the most part and collect....her parents goin on vacations about 15 times a year....its ridiculous...

[RayKay]

Interesting Ampire, I know someone whom was in the pursuit of it early on as they started REALLY expanding and said the training was a little more intense due to demand on time - but it may depend on where you are. Let's face it, put a Tim Horton's up now and you don't need to do much to promote it!

 

As driving by any one of them at 8:00 am can attest! I mean, who remembers Robin's Donuts anymore?

 

I definitely would never have the money to buy in though!

[CaptainPlanet]

Don't do franchises unless you get in very early. Most are just a way of finding someone to manage the store/take on some of the financial risk.

 

If you can still open up a small food business look into doing that. You can make good money.