Although it may seem like it at times, franchising is not designed to be a partnership between a Franchisor (seller) and a Franchisee (buyer). Instead the relationships is designed to provide the Franchisor with a vehicle to grow it’s business buy bringing in franchisees; who, in turn, are looking to establish a proven business and to minimize their risk of failure.

Potential franchises often think that a franchise fee is how a franchisor makes money. Although it may be true for some, the majority of solid franchise systems utilize the franchise fee to pay for the expense of finding and establishing new franchise owners.

The Franchise Fee, as it is often described by the numerous Franchisors, is the cost of putting the Franchisee into the business of the Franchisor, not as a partner, but as a participant. The fee enables then to recoup the cost of doing that. Some of the Franchisors costs include:

• The cost for a turn key systems provided by Franchisor. • Training costs, to make sure that the Franchisee is able to operate the systems and the business o Franchisor’s satisfaction • Marketing and advertising costs Franchisor incurs in order to find qualified franchise Candidates • Costs of qualifying Candidates including rejecting many unqualified Candidates • Salaries, travel, & administration, etc. • Legal expenses to draft agreements defining the methods & terms for the Franchisee to participate (Usually the FDD and related items) • At times, depending on the franchisor, the costs may also include franchise support during the first few months in business, possible real estate location and/or licensing.

The goal of a Franchisor is to help their owners succeed. The overwhelming majority of successful franchise systems make money by collecting monthly royalty payments from Franchisees, not buy selling the franchise units in particular. If the Franchisor is to survive and grow they must do a solid job of selecting, training and equipping their Franchisees. The Franchise fee pays for just that.

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Why are Franchisees Required to Pay Royalties? This is something I have had a few discussions about. Many franchisees believe royalties are for services rendered to the franchisee on an ongoing basis. They are completely wrong. The Royalties are for the franchisors brand recognition and the franchisors proven system.

The franchisor through franchise development (selling more franchise operations) and the associated marketing grows the brand. When the franchise hits a ‘tipping point’ in franchise units sold the brand awareness at the street level explodes. This has been experienced by many large franchisors over and over again. McDonald’s, Tim Horton’s in Canada, etc., have all sold for less before this tipping point was reached. When the bucket tipped and their name was household then the cost for their franchise went up and so did the value of each franchisees business. Royalties support this part of the franchisors business. If you don’t pay your royalties you are not only in breach of your agreement, you are also not reinvesting back into your business in an area that will have the biggest impact on sales, albeit over the longest period of time.

You can bet that in the beginning Tim Horton franchisees didn’t want another franchisee across the street from them and probably tried to hold the Royalty at ransom to object to this intrusion to their 4 square blocks they drew business from. Today, not only are they encouraging this growth they are probably buying the corner across the street from their existing Tim Horton’s. The Tim Horton franchisee is doing more business today as a result of the brand being seen and experienced by millions of Canadians and now Americans, every day. This happened because of the convenience for the consumer to buy the product and now has become part of the Canadian culture.

Why Pay Franchise Royalties? Because it makes good business sense.

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Do you enjoy helping people and want the freedom of being your own boss? Have you ever considered being a Home Inspector? There are many opportunities available and the field of home inspections is growing every day. If this sounds like your kind of work, take a look at a Home Inspector Franchise.

Here are 5 great companies that offer home inspector franchise opportunities!

1. A-Pro Home Inspectors. As one of the fastest growing home inspection companies in the country, you can be proud of the professionalism and integrity that this company provides. All Inspectors are trained and certified in A-Pros’ 500 point comprehensive inspection system. A-Pros’ Inspectors are in high demand because of their customer focus. Named as one of Entrepreneur Magazines best opportunities, A-Pro provides everything you need to deliver a complete inspection and offers several program packages with different rates.

2. Brickkicker Home Inspection. Home Inspectors are trained at Brickkickers Nationally recognized training institute and awarded Certification upon successful completion of the course. Brickkicker certified home inspectors are trained to be experts in the field of home inspection, which generates customer satisfaction and more business. Brickkicker also provides you with ongoing support after graduation to keep you updated on current changes.

3. AmeriSpec Home Inspection Service. With over 17 years of experience in the Home Inspection field, AmeriSpec is one of the largest inspection businesses in the country. AmeriSpec inspectors conduct over 150,000 inspections per year. They specialize in providing professional training, marketing and support. All franchisees go through an intensive two-week training course in their Memphis, Tennessee headquarters. Once you have finished with the initial training course, AmeriSpec keeps you on top of current industry regulations with ongoing technical training and home study systems, as well as an Annual International Convention.

4. National Property Inspectors, Inc. National Property Inspectors, Inc. (NPI) is one of the oldest inspection services in the country. With over 20 years of experience, they have recently expanded into Canada where they operate Global Property Inspectors Inc. (GPI). NPI offers a comprehensive franchise plan for one price which includes two weeks of training as well as room and board. They also provide a proven marketing plan, marketing material and support, all included in one franchise price.

5. Housemaster Home Inspections. Housemaster was the first company to provide a home inspector franchise. They have earned one of the most respected names in the business and go above and beyond in helping you to get your business going. Housemaster offers its franchisees the Right Choice Guarantee. The guarantee states that during the first year after you have completed training and implemented specific elements of the system, if you still don’t feel the business is for you, they will return your initial deposit, less administrative fees.

JD Files is an accomplished website developer and author. To learn more about home-inspector-franchisevisit My Free Franchises for current articles and discussions. Article Source: http://EzineArticles.com/?expert=JD_Files

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Franchising your existing business might be the best possible way to take the opportunity to enter emerging markets. Markets like India and China have complicated rules and regulations about who is entitled to own and operate a business there. The best way often to circumvent these rules is by franchising your operation in these markets.

By using franchising the franchisee owns the business whilst the franchisor takes a share of the profits. Why does an established business want to deal with headache of red tape and restrictive trade practices when with a leap of the imagination the franchise model allows them to achieve the same profitability without the same hassles?

Many British retailers including Argos and Mothercare have used the franchise model to dabble in new emerging markets. The franchise leaders that are quick to carve out major niches in these new emerging markets will grab unprecedented market share before their slow and sure footed competitors move in.

The largest emerging market place is China with India being a close second. China could become the largest market place in the world within the next ten years and overtake the USA.

Franchising is the ideal route for many US and UK companies who want to test the water without expending large sums of capital. This gives them a chance to dip their toes in the water without risking large sums of capital.

Once large organisations find that their business model does actually work in the new, exciting and dangerous market place they can dedicate their resources to find better ways to keep a higher percentage of long term profits for themselves.

China and India are very unique marketplaces. Unlike say for instance Australia not everybody in China speaks the same dialect. The divide between rich and poor is also vast. Tastes vary enormously as does buying power.

In India there are literally hundreds of different languages whilst admittedly the main bulk of buyers with money can be targeted by 2 languages… Hindi and English. Again here spending powers vary and so do belief systems.

In reality trying to expand new emerging marketplaces without testing the waters first is fraught with danger. Franchising offers a real solution to test out the marketplace, learn the structural issues and change your products and marketing so that it identifies with the local marketplace. This does not mean that you can not enter the marketplace independently. You can franchise x numbers of units and then create non franchised units in other territories.

Throughout history economic powers have grown and declined. Asia is growing rapidly and will play an ever increasing role in the ever demanding need for companies to find new customers. The buying power of Asian consumers is rising at a dramatic pace and the consumers are demanding better products and improving service. The opportunity is there now for Established US & Europe brands to market their brands and test the waters before entering fully.

To sum up, the emerging markets are predicted to compete with the western powers in terms of buying power and economic strength. Any company which ignores this is turning a blind eye and letting its competitors expand, gain a foothold and exploit the opportunity whilst they watch and wait.

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Although it may seem like it at times, franchising is not designed to be a partnership between a Franchisor (seller) and a Franchisee (buyer). Instead the relationships is designed to provide the Franchisor with a vehicle to grow it’s business buy bringing in franchisees; who, in turn, are looking to establish a proven business and to minimize their risk of failure.

Potential franchises often think that a franchise fee is how a franchisor makes money. Although it may be true for some, the majority of solid franchise systems utilize the franchise fee to pay for the expense of finding and establishing new franchise owners.

The Franchise Fee, as it is often described by the numerous Franchisors, is the cost of putting the Franchisee into the business of the Franchisor, not as a partner, but as a participant. The fee enables then to recoup the cost of doing that. Some of the Franchisors costs include:

• The cost for a turn key systems provided by Franchisor. • Training costs, to make sure that the Franchisee is able to operate the systems and the business o Franchisor’s satisfaction • Marketing and advertising costs Franchisor incurs in order to find qualified franchise Candidates • Costs of qualifying Candidates including rejecting many unqualified Candidates • Salaries, travel, & administration, etc. • Legal expenses to draft agreements defining the methods & terms for the Franchisee to participate (Usually the FDD and related items) • At times, depending on the franchisor, the costs may also include franchise support during the first few months in business, possible real estate location and/or licensing.

The goal of a Franchisor is to help their owners succeed. The overwhelming majority of successful franchise systems make money by collecting monthly royalty payments from Franchisees, not buy selling the franchise units in particular. If the Franchisor is to survive and grow they must do a solid job of selecting, training and equipping their Franchisees. The Franchise fee pays for just that.

 franchise cost 

When buying a franchise, one of the greatest tools you have at your disposal is the ability to contact current franchisees. Not contacting them and investigating their opinion of the franchisor thoroughly would be a big mistake. When you contact a current franchisee, you get the opinion and outlook of someone who is in the same position that you will be in, should you decide to accept the franchise agreement. For this reason, their advice and input is more valuable than any other you might get. If you have concerns about what the franchisor is like, whether or not their claims are true, how many hours you might work, or how the business is run, a current franchisee may be able to help you make a more informed decision about buying a franchise.

Often, the franchisor will introduce you to a few franchisees, and even take you on a tour to see their locations and to talk with them. These meetings can be helpful, but you have to do extra work to really get the most out of learning from current franchisees. It is a good idea to go back to those franchisees after the tour to ask them any questions you did not feel comfortable asking in front of the franchisor, or to get any answers they might not have wanted to disclose in front of the franchisor. However, keep in mind that even if you are alone with these franchisees, they may not give you a full picture of the franchise as a whole. Some franchisees are paid to solicit new ones, and if the franchisees you speak to were given money, they may not be entirely truthful.

Given this, you must search deeper into the network of current franchisees to get a true impression of the franchise as a whole. In the FDD (Franchise Disclosure Document), franchisors provides contact information for past, current, and future franchisees that you can interview on your own, who are less likely to have a biased opinion of the franchise. The more franchisees you interview, the better, to get the most complete picture. You can ask them things like whether or not they think the franchisor is honest, and what they think of the current FDD. You should also try to interview franchisees from a wide variety of locations, years of experience, and success levels so that you are not getting a biased sample of people either praising the franchisor or complaining about it.

When you interview current franchisees, keep in mind that some of the franchisees are going to be more successful than others. This can impact what they say to you about their opinion of the franchise as a whole. When you interview the less successful ones, try to ascertain whether or not the franchisor is to blame for their lack of success, for instance, if they are not flexible enough or are not offering enough support. Understanding why those franchisees are not successful can help you determine whether or not this franchise is the right one for you, and how to be successful if you do decide to buy it.

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What does a franchise consultant do? In general terms they can take your franchise concept from idea stage to full blown market penetration. They advise you on creating your operations manual, brochures, franchise agreements and help you to market your franchises.

They can advise you on the best methods for raising capital not only for successfully launching your franchise but also for the franchisees to be able to afford to buy your franchise in the first place! Many new franchises fail at the first hurdle purely because they are underfunded at the initial stage.

They will also assist you in your business plans and setting goals. It is imperative that right from the start you have set targets to meet. These will probably need to be reviewed every quarter as real life figures take over from numbers in a spread sheet.

The secret of success in the franchise industry is to find the right franchisees. You can have the best business model but if you fail to make the right selection when recruiting then it is asking for trouble. Marketing using the right channels right at the start will make a great difference to the success of your venture.

The biggest gripe that many franchisors have with regards to franchise consultants is the exorbitant fees that they charge! Undoubtedly some consultants offer excellent service but not many young businesses starting out on the franchise route for the first time can afford their charges!

Some work on a fee only basis whilst others take a percentage of every franchise you sell! The first route is definitely the wiser option if you are sure that you franchise business will succeed and your cash flow allows for a large payment upfront. The second route is wiser if you are not sure about your concept and want somebody else to share the risk.

It makes sense to speak to as many franchise consultants as you can before you embark down this road. Even if you do not end up using their services, just by going through the process of getting a quotation you will learn so much about the franchise industry and the processes involved in successfully launching your franchise.

Creating, defining, marketing and launching a franchise is much more complicated than most people realise. It is not just about being able to sell your franchise but also involves putting support systems in place to help your franchise network. They will require ongoing training as new products are released. The poorer functioning franchisees will need the most help to make their business a success.

As the franchise network grows, more of the management’s time is taken supporting existing franchisees! This can hinder the marketing and growth of your franchise network. The ideal solution is to outsource your training and ongoing support.

If you get a professional franchise consultant whose sole aim is not to milk you for all your cash then it is possible to achieve much faster growth than going it alone. Speak to other franchisors to get recommendations. Some consultants are very good and can really help your franchise network grow quickly.

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So, you want to get a franchise? You figure it’s a good way to be your own boss, without the risk if going it alone? Here are a few ideas to consider:

The Location - The location of a business matters a lot. It’s critical to its success. It makes little sense to buy an ice cream business franchise if you intend to run your operations from Greenland. Consider the prevailing circumstances before you make a choice.

The Franchisor – An obvious one; who are you buying the business from? Quiz up the franchisor. Behind what’s said, and not said, and their tone, you’ll get a good idea of whether you want to proceed with them. Franchisors are keen to sell to intending franchisees so they’ll provide you most of the information you need to discover the opportunities of that franchise and make your own analysis.

The Network - The problem with listening to sales pitches is that you often get to hear the good parts without ever getting an inkling of potential disadvantages. By networking with people who have already bought into franchises, you can investigate the claims of the franchisor for yourself and see if it’s the right one for you.

Time - Every business involves some amount of time and effort. What matters to a potential franchisee is whether they can put in the required amount. Different business franchises have different amounts of time and effort required to make them a success. Find something you are comfortable doing and success will be less of a hassle.

Monitoring - Find a number of business franchises that are similar or the same as the one you intend to purchase. Determine if the mode of operation of these franchises is something that can be easily learned and something you can do. If not finding another one that suits you may be the right thing to do.

The Fees - Buying a franchise may reduce investment risks as you are associated with an established provider. However, at times, this could be costly to you. There are some fees that you will have to bear like the franchise fee which runs from several thousand to hundreds of thousands, with royalty payments, to be made to the owner, which is usually a fixed percentage of your weekly or monthly gross income.

Even if you have not earned a significant income through the business it will still be necessary to pay royalties without fail.

The Restrictions - When you buy a franchise, remember that the franchisor usually controls the conduct of business to ensure uniformity in all the outlets. With these controls, you may find it difficult having your ability restricted to exercise your own business judgment and ideas.

The Staff - Once you find a franchise that suits, make sure that you hire people who are known or recommended by others to work for you. This makes you more comfortable and confident in the running of the business. Once you choose the people to work for your venture, make sure that they undergo the official training provided by the franchisor. Though you think you may be able to train them yourself, it’s better to visit the parent company as you will not be able to teach them everything

Find a franchise that suits your attitude; if you are an evening person, there is no point in investing in a venture that has an early start like a coffee shop. Neither should a morning person invest in a restaurant that runs late hours. So when thinking of franchising, make sure you find a franchise that best suits your nature, to ensure success in it.

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When it comes to expanding your business overseas, franchising has become the Modus Operandi of the day. In Singapore, many businesses including restaurants, café chains and fashion chains have shown interest in and considered setting up overseas franchises. It makes sense financially for them in the sense that the franchisor (the business owner that grants the franchise) can charge an initial fee to the overseas franchisee (the person who takes the franchise). Franchising in effect provides an almost cost-free expansion since the original business receives royalties and a constant stream of income from the franchise. But there are pitfalls to avoid. Franchising may not be suitable for all businesses and an overseas operation can fail for a number of reasons.

This article sets out briefly some of the challenges a franchisor venturing overseas may face and how to overcome and resolve them.

Franchise Systems Companies that wish to enter into a franchise agreement should familiarise themselves with the franchise system. There are three different ways to operate a franchise:

Unit franchise:The business owner allows only one franchise outlet, and licenses all trade marks and other proprietary rights to only that one outlet.

Area franchiseThe franchisee is only allowed to operate under the trade mark or brand name in one designated geographical area, such as the province of New South Wales as compared to the whole of Australia.

Master franchiseThe franchisee is entitled to operate in the whole country, sometimes with a right to create sub-franchises and appoint sub-franchisees within the country.

Costing would differ for each of the above types of franchises and is also affected by the potential market size and share in the targeted country.

Regulations and Other Legal IssuesThe next things to look out for when considering whether to franchise are the laws and local regulations in the targeted countries, which will impact on the franchisor. In countries such as the USA, the franchisor must comply with stringent disclosure requirements while in countries like Indonesia, the franchisor may be required to register the franchise agreement with the relevant authority before commencing operations. These requirements do not really present too much of a problem to the franchisor, but they have to be complied with nonetheless. The franchisor should also pay particular attention to laws and regulations in various other countries that directly affect the business of the franchise. One example of what we mean here is that, since February 2005, franchising has not been allowed in China for foreign retail brands which do not have a minimum of two shops and more than one year of operations in China. This amendment to the franchise regulations has made it difficult for established local brands to franchise to China.

Of course there are perfectly legal solutions to avoid the problems that may be encountered. The rules differ from country to country and, therefore, any prospective franchisor must seek legal advice when venturing into a foreign jurisdiction for the first time to ensure that all such regulations and formalities required under the laws of the targeted country are complied with.

Of course in some cases, it may still not be advisable to commit to a franchise agreement even though all the indications are positive. Some product lines may simply be unsuitable for franchising.

Common Problems Faced by Franchisors There are a range of problems that could be encountered by franchisors and we have attempted to address the most common ones here.

Initial InvestmentOne of the problems when embarking on a franchise, especially for local companies or SMEs (small medium enterprises) seeking to expand overseas, is the costs involved in the early stages of a franchise. Preparation for franchising has to be done without the guarantee of payment and collection of franchise fees and royalties in the short term. The costs involved include:

• developing the franchise concept (normally done with the help of engaging external consultants)

• overseas market research

• legal matters

• providing support

• looking for suitable franchisees

• training

• product costs

• supply of products to the franchisees

For retail chains, financial problems with shipment and manufacturing (even after executing an agreement with the franchisee) have to be considered. The sizable initial costs plus the time lag (about half a year to more than one year for preparations) before the franchisor can recoup the money from the franchisee, may result in cash flow problems for the franchisor. This is especially so for smaller retail chains with a yearly turnover of say US$1m to US$5m as they may not have the financial resources to provide or compensate for any delays.

One example we experienced that illustrates this point is the case of a Singapore shoe retail chain (with about 5-6 shops) which embarked on a franchise for its shoe retail chain in Indonesia. In the contract, it was stated that the balance of payment would be paid after the goods had arrived at the Port of Jakarta. However, the payment was not made. Despite this, the franchisor had no alternative but to release the goods as they were already in the Port of Jakarta. He only received payment at a time much later than the agreed date. This delay caused him some cash flow difficulties.

Problems like this can and should be addressed legally in the franchise agreement just as they would be in a contract for international or cross-border sales of goods.

Financial concerns can also lead to the lack of adequate preparation in coming up with the franchise concept. This can, in turn, lead to inconsistency in the quality of the products and different levels of support or commitment by the franchisor in different countries. The food in a franchise outlet in say, Australia, where the franchisor is located, would taste much better than those in another outlet from the same franchise in China. Though the situation may improve after some time, this is the usual problem that local brands or small medium enterprises face at the onset.

The Trade Mark ProblemUsually, trade marks are the most important intellectual property rights in a franchise. Trade marks are territorial in nature and the franchisor will have to register its trade mark in the targeted country before it can be protected there. Registration in your own home country is not good enough and your local registration will not be recognised in another country.

The franchisor may sometimes find that his trade mark has already been registered in the targeted country by a local third party as was the case with a particular popular Indonesian fashion brand seeking to franchise in Korea and Thailand. It found out the hard way about stolen trade marks when it discovered, after entering into a franchise agreement with a local franchisee, that its own brand name had already been registered by other companies in these countries. To make matters worse, it decided to leave these issues to the local franchisee instead, thinking that the local franchisee would be more familiar with the situation. This caused him serious financial losses as he had already shipped his products to the franchisee. The franchisee subsequently defaulted on payment and did nothing to resolve the trade mark problem. From this it becomes clear that some initial market research in the targeted countries and legal advice are needed when you want to start your franchise.

Registering Your Trade Marks in Foreign CountriesThe Madrid System for the International Registration of Marks (“Madrid Protocol”) and the Paris Convention for the Protection of Industrial Property (“Paris Convention”) are two very important international treaties regarding the registration of trade marks.

The Madrid Protocol provides a one-stop filing system so that the franchisor can file for trade mark protection in his own country as well as his targeted countries at the same time. It does not give you an international trade mark that is recognised by all its member states or all countries across the globe, but provides a convenience of filing in different countries at one go and also reduces the costs of filing.

The Paris Convention on the other hand, provides a very useful mechanism allowing the franchisor to file the trade mark in his home country first at an earlier date and subsequently, within a given time frame, when he decides to file his trade mark in his targeted country, he is able to claim priority or use his first and earlier filing date in his own country as the date of filing in the targeted country. The Paris Convention gives the franchisor time to source for funds before filing for trade mark protection in the targeted countries and the peace of mind that comes with knowing that he can be protected by filing first in his home country.

Take a real-life example of a Korean cosmetics company setting up its business in Singapore. It registered its trade mark first in Korea sometime in December 2005 before coming into Singapore. Upon entry into the Singapore market, it then filed for trade mark protection in Singapore under the Paris Convention sometime in March 2006. However, the directors quickly received notification from the Singapore trade marks registry that there was an identical trade mark filed by their competitor in January 2006. Taking advantage of the Paris Convention, the Korean company was able to claim the earlier filing date in Korea of December 2005 as their date of filing in Singapore and this allowed them to effectively override their competitor’s earlier application. This helped prevent a situation where the Korean company would either have had to shelve its plans in Singapore or embark on costly litigation to recover its trade mark.

In general, it is usually not advisable to leave trade mark matters such as registration to the franchisee. The trade marks should always, where possible, be filed in the name of the franchisor otherwise the brand value or recognition of the trade mark may be diminished in the long run since the public in the targeted country may come to identify the trade mark with the local franchisee and not the franchisor.

Other Intellectual Property Rights

Copyright

This is another form of intellectual property rights which may be of interest to the franchisor. Copyright can attach to many possible mediums and is not confined to brand or logos alone. Instructional manuals, business forms, software and other items may all be protected by copyright. Unlike trade marks, copyright usually does not have to be registered and can be protected in many foreign countries at one time if these countries are all signatories to the same international copyright convention.

Patents

These do not quite fit into the business model of franchises since patents are, by their nature, confined to subject matter of heavy industrial application. This may change in the future as many countries such as Singapore have made or are making changes to their laws, allowing business methods to be patented. Like a trade mark, a patent has to be registered and have its own equivalent of an international system of registration by way of the Patent Co-operation Treaty. The Paris Convention also applies to patents.

Control over Franchisees

It is always advisable to exercise some supervision and control over a franchisee. The first step towards this is to incorporate the right clauses in your franchise agreement at the onset. The franchisor should insist on some form of reporting requirements and a right to inspect accounts. There should also be some provisions to safeguard the franchise concept and sometimes the franchisor’s business methods. Generally, the franchisor should be looking to protect, by way of contractual clauses in the agreement, what may not be protectable under intellectual property laws.

This helps the franchisor to prevent a situation where the franchisee acquires knowledge, copies the franchise concept and uses this to compete with the franchisor. This can sometimes happen at the end of the franchise period. Basically, there should be restrictions imposed on the franchisee when dealing with materials or other property of the franchisor, and these should be returned and accounted for by the franchisor upon the expiry or termination of the franchise.

See You in Court – But Which Court?

It may be at times necessary to take legal action against an errant overseas franchisee that is outside the jurisdiction of the courts and also beyond the control of the laws in the franchisor’s home country.

It is advisable to make some provisions for this in your franchise agreement. The two important considerations here are the place to sue and the law to apply. It is important to seek legal advice for these matters since your choice of place and law often determines success and directly affects the prospects of recovery as rules may differ from country to country. Some countries may have bilateral reciprocal enforcement regimes allowing their respective courts to recognise and enforce each other’s judgments while others may be signatories of international conventions to the same effect. It is important to know these in order to choose your place to sue and the applicable law.

Sub-Franchising and Exchange of Goods

Another problem with franchising is the inconvenience caused to end consumers when it comes to the exchanging of defective products. This is especially so where there is sub-franchising created in different places in the same country. For instance, in Australia, when a customer buys an item of clothing from an outlet in Sydney, he would not be able to exchange it in the franchise in Melbourne. This also happens in Indonesia, especially if the shop is owned by different people. That is why some retail chains like Hammer and Nail (Indonesia) prefer to own the business themselves. This can be used either as an alternative or a stepping stone to establishing a fully fledged franchise.

Raise Public Awareness First

It may be easier for local brands who want to expand overseas by franchising to consider setting up their own flagship store in the overseas country first. This would raise public awareness of their brand and product in the targeted country and help to attract more franchisees later on. Famous local brands such as BreadTalk in Singapore may not be known to anyone in overseas countries, such as Germany. As such, potential investors in Germany would be hesitant to invest in the brand. By setting up a flagship store, the franchisor can test the local market.

However, before venturing overseas, research should also be done on consumer behaviour to make sure that the consumers in that country would appreciate the product, bearing in mind that different countries have different cultures, tastes and market trends.

Franchising –

A Great Tool for the Right Business with the Right Knowledge Franchising is a useful tool when it comes to expanding your business overseas. However, as we have shown here, there are also potential pitfalls and risks involved. This can be avoided or at least minimised if the necessary preparatory work is carried out before you venture into a franchise agreement with a foreign partner.

Acquiring knowledge of consumer behaviour patterns, local market conditions and regulations, developing a suitable franchise concept as well as paying attention to various details in your franchise agreements are just some of the more critical matters that you, as franchisor, should take note of.

Knowing your market and your rights as a franchisor or a trade mark owner lays down the foundation for the creation of a successful franchise.

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We’ve all dreamed about it - having a job that allows us to make a substantial income whilst having a flexible lifestyle. This is achievable with a part time franchise.

The ideal candidates for a part time franchise are busy professionals looking for a second income or stay-at-home parents who want to spend time with their kids and make extra money. Part time businesses have all the added benefits of traditional franchises including brand recognition, training and support, and a tested, proven system, all allowing the franchisee to take less risk. Further, most part time franchises allow the franchisee to work from home, although they may require regular visits to clients depending on the business. Examples of part time franchises include:

• Business consulting and accountancy franchises where the franchisee works with clients to cut their costs or put their finances in order. • Dating franchises where the franchisee organizes events at different venues and provides Internet dating services for clients via their website. • Vending franchises where a vending machine or snack boxes are installed and maintained by the franchisee. • Automotive franchises where the franchisee travels to provide convenient car repair and valet services to the clients.

Benefits of Part Time Franchises

A part time franchise opportunity presents many benefits, including a healthy work/life balance, a second income, and reduced risk. However, do not let these benefits fool you into taking it less seriously than a full time franchise. Do your research and ask the tough questions. You don’t want to enter into the franchise opportunity and find out it’s not as “part time” as was advertised. Also keep in mind some franchises are not exclusively part time opportunities, yet you can make them that way. For example, if you become a domestic cleaning management franchisee, the time requirement will be determined by how much business you solicit. Alternatively, if you do lease a retail space, you may manage it part time and hire someone to oversee the operations on-site. This option will work well if you have a great pool of candidates to choose from since you want a qualified individual with the interpersonal skills to effectively manage other employees you may hire.

Evaluating Part Time Franchises

Consider the following elements when investing in a part time franchise opportunity, as you will want to make sure you benefit from them. They are:

• Flexible hours: You usually get to decide how much time you put into this business and what your hours will be, making it much more flexible than a typical 9 to 5. • Few employees (if any): Depending on the franchise, you may need to hire some employees. For instance, domestic cleaning management franchises usually allow you to operate out of your home by hiring cleaners to do the actual cleaning. • Low overheads: Part time franchises are generally low-cost, low risk endeavours, largely because they don’t require a storefront or office. The low capital and operating costs allow for a relatively quick return. For instance, some online business franchises can be run from your home with nothing more than a computer, an Internet connection, and a phone. • Minimal equipment and stock: Part time franchises generally don’t require much equipment or inventory stock. This means that you don’t have to spend money on costly items and you won’t have to find the space to store them!

Steps to Achieving a Part Time Franchise

Before becoming a part time franchisee, discuss important details with the franchisor about the opportunity, including what you will specifically need to do, what kind of support and training you will receive, and how much capital it will take to start the business. Make sure to ask pointed questions to determine whether this is really a part time franchise or not.

Then, speak with current franchisees to find out the real deal on the part time franchise. Ask how many hours “part time” constitutes for them, whether or not they work from home, what kind of earnings they are seeing, and whether they recommend this franchise to others.

Keep in mind you will need to be motivated enough to put in the hours, disciplined enough to work from home, and highly organised.

Also, beware of opportunities that sound “too good to be true” - they often are. Even if this is only a part time franchise, you will still need to put in the effort to make it a success. Those franchises that guarantee you will turn a large profit in a short amount of time with no effort at all are probably not legitimate. Set realistic expectations for how much you can make with a part time franchise.

Browse through Franchise Direct’s many part time franchise opportunities to find one that catches your eye.

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