Archive for the ‘Franchise’ Category
Sometimes when people have a hard time starting up a business of their own, they opt for franchising. Franchising is a business relationship in which the owner of the business (called the franchiser) gives the independent businessperson (the franchisee) the right to use the business name, to market the product or service and to distribute such product such as goods and services. So for the aspiring franchisee, here’s a heads up as to why you should venture into a franchise business.
First, when you franchise, you don’t have to acquire such a huge capital or investment because the concept and business operations, productions are already given by the franchiser. All you have to do is to set them up – business permits, the building, the interior decoration, the products and the like. Unlike starting out your own business, a lot of costs would occur first.
When considering for a franchise, opt for a business concept that suits you and which you really, really like.
Your passion and eagerness to learn would make it easier for you to cope with different trials you can encounter. You may succeed in that easily because your passions drive you to work harder.
Eric Schiffer is a socialite and the author of the book, “Emotionally Charged Learning.” Born in Cleveland, Ohio in 1967, Eric Schiffer attended Duke University and graduated from with a bachelor’s of science degree in engineering. He joined to the Harvard School of Business for his MBA. After completion of his master’s degree in 1987, he was employed by Oxford partners. In 1991, he joined the 99 cents only store where over the years he has been a director in the company. In 2005, he was promoted to the position of Chief Executive Officer.
The book, “Emotionally Charged Learning” explores the employer and employee relationship. It provides an insight into the basis of development of a healthy relationship that translates into increased productivity. He relates various aspects such as emotions, forces of education and sophisticated entertainment to improving the learning atmosphere within an organization. He provides practical business solutions through relation to real life scenarios supported by comprehensive research. The book has received international acclamation as well as criticism. He was also recognized as one of the top ten entrepreneurs by the business week in a list included such business magnates as Sir Richard Branson.
Fundamentally there are two types of franchises. They are Product distribution franchises and Business format franchises. The most significant portion of the product distribution format is that the product itself is manufactured by the franchisor. Many times some sort of pre-sell preparation is necessary on the franchisee end before their sale.
One more important difference between these two types is that in product distribution type of franchises, the franchisor licenses their logo and trademark to the franchisees however he/she does not provide the complete system necessary to run the business successfully. However in the business format type the total system is supplied by the franchisor for running the business. Nowadays most of the franchises are of the type business format franchises. If you look at United States, almost 80% of the totals of 770,000 franchise businesses are of the business format franchise type. Lets have a close look at these two types of franchises.
Product Distribution Franchises: In this type of franchises, the franchisees sell manufactured products to the franchisor. This type of business can often be found in industries such as automobile, drinks and automobile accessories. These franchises are similar to the supplier-dealer kind of relationships. However in the product distribution franchises, franchisee has the benefit of getting more services from franchisor than compared to what dealers will get from their suppliers.
Albert Einstein once said about filing taxes, This is too difficult for a mathematician. It takes a philosopher. While I dont think that Einstein was a franchisee, its easy to see how many people in the franchising industry could share his opinions. So, what is franchise tax, and is it really that confusing? A franchise tax is a tax levied by a state on a business owner, for the privilege of doing business in that state. Every state calculates this tax differently, often on an individual basis. It certainly can get confusing, with factors such as the taxpayers net worth, net income and amount of stock sold in the mix, and it is advisable for every franchisee to seek professional counseling to complete a franchise tax return correctly.
Not only do the franchise tax rate calculation methods vary from state to state but the percentage that must be paid varies as well. Some states, such as Delaware have a higher franchise tax percentage rate. Some, such as Nevada, have none at all, or a small flat fee. Bonus for you, Nevada! When doing research, a helpful hint you can use is that states with higher corporate tax rates have lower franchise tax rates. When you are doing your franchise research and evaluating locations, tax rates can have a big impact on your decision.
You started your own business. You put in the twenty hour days to get it off the ground because you believed in it, and you knew it could work. Now you have a very successful business. You are making money based on a sound idea and a high level of customer service. Now you see your business in every shopping mall and on every street corner in America. You are ready to franchise your business. Where do you start?
What exactly is a franchise? A franchise is a network of interdependent businesses that have a relationship that allows a number of people to share three basic things. First of all they share brand identification. They are all selling the same product in the same manner. Second, they are sharing a business model with a proven track record for success. Finally, they all share a common distribution and marketing system that allows them to do business extremely efficiently.
The common goal is to grab a large chunk of the market share and gain more customers than your competitors.