The Basic of Franchise Business

Just to sharing here about the Franchise Business.

Definition for franchising from Wikipedia:
Franchising (from the French for honesty or freedom) is a method of doing business wherein a franchisor licenses trademarks and tried and proven methods of doing business to a franchisee in exchange for a recurring payment, and usually a percentage piece of gross sales or gross profits as well as the annual fees.

Pros of Franchise Business
-Low Risk
-Proven Business System
-Brand Leverage
-National and local advertising benefits
-Business Assistances

Cons of Franchise Business
-Lack of control over the business system
-Recurring payment

Fees of a Franchise Business
1. Initial franchise fees. This happens to be your first deposit to your franchisor and is non-refundable. It may range up from several thousands to several hundred thousand dollars. This usually paid for the licensing to run the business and some other processing fees.

2. Royalty payments. Most of the time, franchisor will ask to you pay a certain amount of payments based on the percentage of your weekly, monthly or yearly gross income. In returns, they will assist you to run the franchise business.

3. Advertising fees. You may have to pay some advertising fees to improve the brand awareness of your franchise business. In most cases, this money will be spent for national advertising instead of on your particular outlet and local market.

10 franchise business in 2007:

1) Subway
2) Dunkin’ Donuts
3) Jackson Hewitt Tax Service
4) 7-Eleven Inc.
5) UPS Store, The/Mail Boxes Etc.
6) Domino’s Pizza LLC
7) Jiffy Lube Int’l. Inc.
8) Sonic Drive In Restaurants
9) McDonald’s
10)Papa John’s Int’l. Inc.