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The Franchising Boom

ArticleID 83  
Writer Grace Odinga
Category Personal Article



Franchising has gained so much attention in global trade for the and this is some evidence to that;

 Sales of $1 trillion in virtually every product or service imaginable.


 More than 4,500 franchisers operating some 600,000 outlets worldwide.


 Franchise sales account for 44% of total retail sales.


 A new franchise opens somewhere in the world every six-and-a-half minutes.


Types of Franchising

 Trade name


 Product distribution


 Pure (or Comprehensive or Business Format)


Benefits of Franchising

 Management training and support


 Brand name appeal


 Standardized quality of goods and services


 National advertising program


 Financial assistance


 Proven products and business formats


 Centralized buying power


 Site selection and territorial protection


 Greater chance for success


Disadvantages of Franchising

 Franchise fees and profit sharing


 Strict adherence to standardized operations


 Restrictions on purchasing


 Limited product line


 Unsatisfactory training programs


 Market saturation


 Less freedom


Myths of Franchising

1. Franchising is the safest way to go into business because franchises never fail.


2. I’ll be able to open my franchise for less money than the franchiser estimates.


3. The bigger the franchise organization, the more successful I’ll be.


4. I’ll use 80 percent of the franchiser’s business system, but I’ll improve upon it by substituting my experience and know-how.


5. All franchises are the same.


6. I don’t have to be a hands-on manager. I can be an absentee owner and still be very successful.


7. Anyone can be a satisfied, successful franchise owner.


8. Franchising is the cheapest way to get into business for yourself.


9. The franchiser will solve my business problems for me; after all, that’s why I pay an ongoing royalty fee.


10. Once I open my franchise, I’ll be able to run things the way I want to.


Franchising, Boom, Franchiser, Franchisee, Make Money, Entrepreneur, Entrepreneurship, Business, Start a Business
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