Just as network marketing or multi-level marketing is the
"new" business model, so franchising took the world by
storm in the fifties and sixties. In fact it was even
outlawed in some countries, would you believe.
It is, of course, a traditional business simply backed and
sometimes even controlled by a parent company that in most
cases offers advertising support (not always, be careful)
and a business plan that should include a daily schedule or
process of operation that works successfully elsewhere.
This is perhaps the only advantage. If you're store number
120, you want to know that of the other 119, even if 5 have
failed, the other 114 are successful, and why. You should
have the parent company not only show you why, but more
importantly how.
But, here, the advantages stop. Like any traditional
business, you will still have all the disadvantages. The
parent company might train your staff, but there is still
the risk of them stealing and giving you daily hassles, as
staff do in any business. Your parent company might have a
good system for stock control, but stock will be stock and
it will go missing. And then there is the issue of rent.
Before the parent company will sign you on and take the
bulk of your money, they want to know that you have a lease
signed and ready, preferably for a number of years. They
don't want to blow the trumpets about your new store only
to have you close down or kicked out after a few months. A
lease means being tied to someone legally for that period.
Let's say you pull out, or become, sadly number 6. You owe
the letting agent rent for the full period.
Franchises can range from as little as a few thousand
dollars, but a good store will probably cost you $150 000,
sometimes with stock. Let's say you have this money and
believe in the product, you still have the difficulty
deciding whether you want to be involved 14 hours a day, or
whether you want to appoint someone else as a manager. Each
option has a serious disadvantage. If you're opting out of
your present employment and want something to keep you
busy, and 12 hours a day is no problem, you will probably
succeed. If not, then the manager option will bring its own
problems, as you can imagine. Why would anyone else work as
hard as you? Do you know that you can trust them? Can you
walk away from the business for three months, go on
vacation and find it doing better when you come back? If
not, you're still in for at least a few hours a day, and
then the money you dreamed of earning is now diluted by the
manager's salary. If he or she is bad at their job, they'll
cost you; if they're really good why should they stick
around? They probably have their own plans, and your
business is free university for them, while they're being
paid!
Even a really cheap, small franchise costs money ' let's
say around $15 000. Why put up with all the disadvantages
when you can start something from home for far less and
build it up over time. There are thousands of good
affiliate or network marketing businesses that can be
started for far less than even $2000, and with a few hours
a week, you can build it up a momentum that allows you to
resign for your full-time job.
Try to choose one with little or no stock, as few employees
as possible; preferably just you and a family member,
perhaps. Make sure the product has an international
flavour, that it is reasonably priced and that it is based
in an industry that is growing: travel, health for
instance. A few hours research on the internet will unearth
many. Make sure the company has been around for some time,
that the claims of the other affiliates are not too wild:
watch out for pictures of sports cars, mansion and pictures
of bank statements. Rather side with those that say it is
going to be hard work and will cost you a little in the
beginning, at least for advertising.
I'd rather invest $1000 in something I can build slowly
without any of the disadvantages of franchising mentioned
above, than part with $150 000, and on top of that a 3 year
lease agreement up front, only to find these disadvantages
simply overwhelm me.
A viable home business does work. And added to this is the
usual affiliate marketing pay plan that allows for residual
income. This simply means that you can get paid over and
over again for work done in the past. For example when you
assist someone else to join the business and they make
sales, or find prospects, you earn from their efforts, for
as long as they are alive and working the business. Now
that's exciting. And with this, it is possible to go on
vacation for three months (after building the business, of
course) and come back to find your team having grown as
much as your bank balance.
Franchising? There are some advantages. But why pay someone
else for an idea when in almost all networking marketing
business models, they will give it to you free? Go find one
now.
----------------------------------------------------
Michael Klerck is a writer and winner of the Mondi Paper
Magazine Writer's Award for work in Men's Health. He is
also an avid promoter of the best luxury resorts membership
in the world today. Visit his site:
http://luxuryresortsVIP.biz and see the excellent movie.
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