How Can Franchisees Reduce Franchise Risks?

First, how does the franchise relationship start?

Most of the franchising relationships come from existing enterprises.

When owners of an industry independently develop more stores, they usually consider using other people's funds to expand their businesses, and by developing the franchise system, they agree that when an independent owner uses their specific trademarks, products, services or systems, they will have affiliation, while franchisees are required to collect royalties, regular royalties and so on.

Franchise is an important means for the growth of business enterprises.

In 1991, the total number of stores in the United States totaled 54 000, with a turnover of 757 billion 800 million yuan, accounting for nearly 1/3 of the total retail sales in the United States, with a total employment of 8 million people. It was predicted by John, the great trend writer, that "to twenty-first Century, the total US turnover in the market will reach 50%".

Third, how to become a franchisee?

The first step is to confirm the status of the franchise system.

We must evaluate and analyze the quality of each franchise system, select the most qualified individuals, then contact the company directly, collect information about the introduction, instructions, and so on, and decide whether to join.

Fourth, what should we know before joining?

Before joining any system, franchisees should join in.

Contact the existing franchisees.

When contacting franchisees, the following information should be requested: the competition situation in the same industry, the detailed list of the fees to be paid, the qualification requirements for the franchisee, the initial investment cost, the conditions and rights for the suspension or pfer, and the contents of the draft contract.

As for visiting the existing franchisees, they are requested to provide the following information: profit status, partnership between franchisees and franchisees, investment status and common problems after joining.

In addition, the lawyer should consult the lawyer about the legal matters involved in the contract so as to prepare for future needs.

The cost of joining is usually not low.

Taking the United States as an example, the initial franchise is between $5000 and $35000 because of the different industries. The monthly profit is about 3% to 7% of the monthly turnover, and the advertising fee is about 3% of the monthly turnover. In addition, the franchisee sometimes has to pay 3% to 8% of the monthly turnover as a equipment and land rental fee.

After statistics, the benefits of participating in franchising can be summarized as follows: the franchise system can provide famous brands attracting customers, and the time needed to develop franchising stores is shorter. The franchising system provides proven business management formulas, and the management experience is faster and more effective, and can be trained to increase the possibility of successful self running business in the future. It has greater job satisfaction than the employed salary, and has less risk than individual independent operation, and enjoys a lower purchase cost. It is more independent than the employed salary. It is easier to expand through affiliation system, and can be avoided from being eliminated.

As for

There are many divergent opinions on the franchise chain. Among them, the 4 evaluation items put forward by IFA are: financial performance, company growth and management quality, company stability, and the quality of headquarters and franchisees. In addition, we should pay attention to the attitude and service of joining the headquarters, and to evaluate the relationship between headquarters and franchising.

As for the company's growth, management quality and financial performance, it can be judged by its operation status. Companies that have room for growth can maintain commodity innovation and competitiveness, and the stability of a company can be found through newspapers and magazines or by the manufacturers' department. The chain system with unstable stores, large turnover rate, red flashing lights and low confidence index of the franchisee will inevitably become loose and lax.