start-up at Business Franchise

Franchise is evil.
At least officials of Village Board of New Paltz are thinking so. They decided to announce their village a franchise-free zone.
“We need to level the playing field,” Mayor Jason West said.
“We need to give those who do want to open local businesses some kind of a leg up,” he said. “It seems a simple way to do that is within the 1.7 square miles of the village (is to know) you’re not going to have to compete with that franchise that is doing bulk buying.”
So they are going to examine carefully all the cases of new business registrations in order to be sure that it’s not a franchise start-up. They are using a kind of formula to do this. A new business should not possess a “standardized menu or standardized array of merchandise with 50 percent or more of in-stock merchandise from a single distributor bearing uniform markings.” Other business features would include use of architecture, facade, or signage considered to be part of a “format which causes it to be substantially identical” to other businesses.
Anyway they think that a franchise business disturbs their local enterprises so they are not going to allow this happen.
Certainly they have to permit some franchises even to that area as there are businesses that couldn’t be performed locally. But the main rule applies:

NO MORE FRANCHISES.

By the way have you ever thought about franchise impact on your life? I’ve just copied the industries that possesses franchises from www.franchiseopportunities.com
You could fill these industries by franchises you know at your area.

Advertising
Direct Mail Advertising
Internet
Mobile Motion Advertising

Auto Products/Services
Detailing
Muffler and Brake Repair
Oil Change
Paint and Body Repair
Parts
Products
Radiator Service
Services
Transmission
Windshield Replacement/Repair

Beauty
Cosmetics
Hair
Tanning/Spas

Bridal
Accessories
Full Service

Business Opportunities
Dollar Stores
Home-Based
Internet
Publishing
Security
Tanning Beds/Pools/Spas
Vending

Business Services
Advertising Franchises
Brokers/Consultants
Business Consultant
Check Cashing
Collections
Commercial Cleaning
Direct Mail Advertising
Document Shredding
Embroidery
Employment/Staffing
Entertainment
Expense Reduction
Financial
Income Tax/Accounting
Insurance
Limo Services
Mail/Shipping/Packaging
Medical Billing
Mobile
Printing/Copying
Promotional Items
Publishing
Real Estate
Restoration
Sales/Marketing
Senior Care
Shipping/Transportation
Signs
Telecommunications
Training/Development

Child Related
Child Fitness Center
Child Party Franchises
Children’s Services
Children’s Clothing
Education

Cleaning/Maintenance
Automotive Services
Blind and Window
Carpet Cleaning
Commercial Cleaning
Drapery/upholstery cleaning
Food Service
Maid Services
Sanitation

Computer and Internet
Computer Internet
Computer Products
Computer Services
Computer Training
Internet Advertising
Internet Consulting/Training
Internet Service Providers
Mobile/Onsite
Website Design
 Financial Services

Check cashing
Pay day loans
Tax Preparation

Foods
Baked Goods
Bar Grill and Pubs
Cafe
Candy/Snacks
Chicken
Coffee/Espresso
Cookie
Energy Drinks
Fast Food/Take-Out
Foods Restaurants
Full Service Restaurants
Hamburger
Hot Dogs and Sausage
Ice Cream/Yogurt/Frozen
Italian
Juice Bar
Mexican
Pizza/Pasta
Sandwich/Delis
Seafood
Smoothies
Soups and Salads
Speciality Foods
Taco
Wings
Wraps

Health/Fitness
Hair/Beauty
Health/Diet/Fitness
Lady Fitness
Medical/Dental/Optical
Nutrition
Tanning
Weight Loss

Home/Mobile Services
Advertising Services
Air Purification
Appliance Repair
Automotive Services
Business services
Cabinet Refinishing
Carpet Cleaning
Closet Organization
Debt Consolidation
Decoration/Remodel
Delivery Services
Drapery/upholstery cleaning
Environmental
Food delivery
Garage
Glass/window replacement
Handyman
Pets
Home based
Home Improvement
Home Inspection
HVAC
Lawn/Landscape
Maid Service
Moving/Storage
Outdoor Lighting
Painting
Pest Control
Photography/Video
Plumbing Services
Propane
Real Estate
Sanitation
Security Systems/Alarms
Senior Care
Sports & Recreation
Storage/moving
Surface Restoration
Tools and Equipments
Water Treatment

Lodging
Hotels/Motels

Manufacturing
Home Furnishings
Homes
Manufacturing
Mattresses
Signs

Pet Related
Kennel
Pets Training
Retail

Photography/Video
Products
Services

Real Estate
Agencies
By Owner

 Restoration
Fire/Smoke Damage
Floor
Surface

Retail
Arts/Crafts/Framing
Auto/Truck/Trailer Rental
Automotive Services
Beauty
Blind and Shutter
Business Services
Cellular Phone
Clothing/Apparel
Convenience Stores
Dollar Store
eBay drop off stores
Embroidery
Flooring
Flowers
Furniture/Furnishings
Gifts/Collectibles
Hair and Beauty Salon
Lawn/Garden/Home
Manufacturing
Party
Pets/Animal Supplies/Services
Photography/Video
Printing/Copying
Recreational/Sports
shipping/packaging
Signs
Specialty
Tanning
Tools/Hardware/Equipment
Travel Services
Video/Audio/Electronics
Window Treatment

Seasonal
Amateur Sports Events
Landscaping

Securities
Investigations
Securities

Security/Investigations
Document Shredding
Systems/Alarms

Senior Care Services
In-Home Care
Senior Health Centers

Sports/Recreation
Amateur Sports Events
Fitness Centers
Golf Franchises
Photography/Video
Recruiting
Sporting Goods
Sports Bar

Travel
Agency
Cruise
Lodging

Vending
Vending Machines

Wholesale/Distribution
Associations
Brokers
Distributors
Wholesalers

While searching the Internet for interesting information about franchising to share with the readers of my blog I found an outstanding idea that had been realized by the company called Entrepreneur’s Source. They managed to create their franchise business helping others to start-up and operate franchise businesses. I understood that I had to write about it.

The business system created by Entrepreneur’s Source can be divided into 2 parts (as I understood from the information in their web site). On the one hand they work with the companies that already have their business systems. The company offers its clients to expand their operations through creating a franchise system for their business. I really liked the way they present the idea. They explain that they are not consultants but coachers for their clients. They say that every person tries to decrease or avoid risk. It’s natural. And they promise their clients to help to decrease a business risk. Based on their experience the Entrepreneur’s Source is going to train their customers how to swim in a seethed and sudden water of business-sea. They use the idea of coaching comparing their service with the process of teaching to read. On their web site they ask a question: Did You Teach Yourself to Read?
As a sports coach develops an individual training program for each sportsman, Entrepreneur’s Source develop a franchise program for the clients taking into consideration all individual peculiarities. Their package of services includes:
1. Feasibility assessment. Analytics of Entrepreneur’s Source determine if business is franchisable in general.
2. Business plan. They create a document answering marketing, production, and organizational and financial questions concerning prospective franchise business.
3. Raising capital. They help in creation documents and calculations necessary to obtain an external financing.
4. Regulatory compliance. They check if the franchise system and all documents (including disclosure and agreements) meet all the legislative requirements.
5. Marketing & advertising. Well-developed promotion program is a key feature of any franchise system.
6. Lead generation and candidate qualification.
7. Expansion plans
8. And much more …

On the other hand Entrepreneur’s Source deals with those thinking to start-up their business. And they attract prospective franchisees not only for the franchisors mentioned above but also for themselves. Yes, before they decided to earn money while helping others to start-up franchise business (as franchisor or franchisee) they created such system for their own company. And it gave them the experience on how to qualify candidates in order to choose appropriate ones. Now they use the following scheme: they don’t use contract employees to run their satellite offices, but open each new office as a franchised business. The royalty payment is 25%, and Entrepreneur’s Source franchisees pay it from every placement fee – the money received from franchisor when the company places a candidate.

As for me I really liked this idea. The only negative thing in this business is concerned the money that prospective or existing franchisor has to pay to this consulting company. I haven’t found the exact information on the company’s web site, but the other sources say that your franchisor pays them a commission, typically 30% to 75% of the franchise fee. Certainly it is a trade-off. You can set-up your business system yourself or turn to professionals. In the latter case it will cost you and your potential franchisees, as you’ll have to increase the initial fee to cover the consulting costs.

Starting your business while singing a franchise agreement has many advantages over starting a company yourself. It is easier, it takes less time and you can get help and support from more experienced partner (the main company). But not so many people decide to buy a franchise license. I think that one of the main reasons for this is initial fee that a potential franchisee needs to pay to franchisor.
Today I want to say a few words expressing my opinion regarding why the franchise fee is so high. My observations are based on the following statistics given by the leaders of some franchises:
“Ron Eriksen, the vice president of market development for the Baby’s Room USA Inc., Elmhurst, Ill., provides the following facts: last year the company sends out 775 four-color brochures by Priority Mail costs $14. Only 6 percent of those recipients sent back a preliminary application form; 1.8 percent of the 775 became new Baby’s Room franchisees”.
My calculations and comments:
It means that the company spent $10,850 only for colorful brochures and received only 14 new franchisees (775 requests multiplied by 1.8 percent). So only to get the money back the Baby’s Room USA Inc. has to increase the franchise fee by $775. Is it fair? Maybe franchisee will say no because nobody wants to pay for the others who decided not to become franchisees of that company. But it’s absolutely fair from franchisors point of view.

“Steven Romaniello, president and chief operating officer of US Franchise Systems Inc., in Atlanta, says that his hotel company spends $50,000 on promotion and recruitment efforts for each franchisee who eventually buys a Days Inn, Microtel or Hawthorn Suites franchise”.
No comments needed. Even if franchisor decides to cover a part of this sum himself (let’s say 50 percent) the other part has to be included into the initial fee. The other part will be received by franchisor later in the form of royalty payments. By the way this can explain why sometimes royalty is greater than the cost of current support provided to franchisee: franchisor tries to cover some earlier expenditures.
Greg Longe, president of the Molly Maid and Mr. Handyman franchise systems in Ann Arbor, Mich., says, “Our Internet leads are way up this year, but all that means is that we have to do a lot more work to generate a solid candidate. Most of the people we’re hearing from aren’t qualified to run our concept.”
My comments:
When he says “a lot more work to generate a solid candidate” he speaks about people who will do this work. Company needs to hire qualified manager (or even managers) to deal to convert at least some of the leads to new franchisees. Company bears the costs of salary, Internet and phone communications, and many others dedicated to manager’s work. And as every cost it will increase the final price. In our case it will increase the initial fee in the start-up period or royalty during the operational period.

And initial fee includes not only advertising and recruitment costs. In most cases the main company provides training for the chief manager or key personnel of new franchisee. To do this they need to pay to trainers, to buy some stuff (like materials, paper and so on)…
Thinking about all that things I came to the conclusion that low initial franchise fee can be a bad sign (not “is” but “can be”). Certainly it depends on business sphere and region or country. But at least it’s a point to think over one more time whether to sing a franchise agreement with a company that sells its idea for the price that doesn’t cover the costs. It may seem strange…

Writing about the SBA loans for new and expanding small franchises I met the list of public goals. It was said that in order to get a bigger credit your company needed to meet some of these goals. Some of them are easy to meet; the others are difficult not only to meet but also to prove that you can do it. But one of them has attracted my attention – when small franchise business is trying not only to earn money or to help in achievement of personal goals of its owner but helps those who can take care of themselves. I’m speaking about those whom we usually call “disadvantaged individuals”. This article is devoted to them and their ability to participate in business and in life in general by entering franchise system.
 
In general there are two different points of view regarding disadvantaged individuals. The first group of people thinks that it’s better not to attract attention to them at all. They say that this will disgrace them and hurt their pride. The people with the opposite opinion believe that we need to do as much as possible to help them; we need to create the special conditions in every sphere of life and business is not exclusion. As for me I’m somewhere in between these two extremes. And speaking about franchise business I think that there must be created some preferences for such group of people. And these preferences have to be results from the obstacles that disadvantaged individuals face.
 
Below I write about that obstacles and the way to decrease the influence of them on the disadvantaged individuals while starting their franchise business.
 
1. Obstacle: Little knowledge in franchise sphere. This problem is divided into the several sub-problems.
1.1. Availability of information about franchise concept in general. Many of that people have very little or even no business knowledge. As most of them have at least one problem concerning communication (reading, watching, hearing and so on) they get the information from doubtful sources – their friends who are not in business, relatives or neighbors. As I think the society has to create some means of information to provide reliable, trustworthy facts about advantages and disadvantages of franchise business, opportunities and special programs for the disadvantaged individuals. These means of information has to be technologically different to cover as many of such people as possible.
1.2. Sufficient background necessary to understand, to manage and to operate a small business franchise company. This obstacle includes not only general information but also real business skills. I want to mention that disadvantaged people are very vulnerable and they may consider ordinary business problems as their personal failure. I think that the role of the society in this case is to help them to avoid those problems. Maybe we can think about some business incubators or services of special consultants for franchises managed by disadvantaged individuals (financed by the money of franchise associations and small business organizations).
 
2. Obstacle: Ability to compete with non-disadvantaged franchisees. This problem can be characterized as psychological even more that economic or medical. Some of such people consider themselves incapable to start something themselves. But if they see the results shown by those who are in worse conditions they can cheer up. I suppose this to be the main role of the society – to show disadvantaged individuals that from business point of view they are absolutely equal to ordinary people. And even more! The statistics proves that people who have health problems in one sphere usually are extremely talented in the other.
And one more statement: being disadvantaged they can better understand the needs and want of other disadvantaged individuals. As a result their business can meet that needs much better; and it’s the first step to better competitiveness.
 
 
3. Obstacle: It’s too expensive as disadvantaged individuals have more expenses to cover in comparison to ordinary people. I agree that this is an obstacle; but on the other hand franchise business can bring them additional money in the form of profit. I think that government has to support (and I know that in many countries it does) the willingness of such people to start their own business as it will help to achieve the long-term goals too. Also I believe that franchisors must include special paragraphs in their franchise programs for disadvantaged individuals buying the license from them to make it cheaper…
 
4. Obstacle: It’s physically difficult for the disadvantaged individuals to collect and to provide all the necessary documents to start-up the franchise business. I think that authorities must pay attention to this problem too. We create special parking slots for such people, help them in the shops and so on. I think that there wouldn’t be any problem for all sides (I mean banks, franchisors, lawyers, local authorities and other institutions) to introduce some light procedures for such groups of people. It’s not only a noble  but also a good economic decision. Will anybody argue?
 
Certainly there are more other obstacles for disadvantaged individuals to start their franchise business. Here I mentioned only the main as I think…

Some time ago I promised to write about financing your franchise business. I think that today is a good day to start. My first “finance article” will be dedicated to small companies because:
-I like small business as they produce goods and provide services that big companies don’t even consider;
-for small business it’s much more difficult to find money and also to find the information about where to find it and how to apply; they don’t have a separate department dealing with credits and refinance in their structure. As a result small business owners with less than 10 people stuff very often have no time to look for the most attractive variant of financing.

Here in this article I’m going to speak about credit, finance and refinance opportunities provided by SBA (Small Business Administration). Certainly the first thing to be mentioned is that SBA is not a bank or financial institution. Their goals expand much wider than financial sphere. And in many cases they don’t give credits but provide guarantees for loans made by private and public financial institutions, government organizations and local authorities.

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SBA is a guarantor of loans. As a franchisee you may need it to increase your reputation in franchisor’s or lender’s opinion. If you need it would be right to apply for THE BASIC 7(a) LOAN PROGRAM
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Basic 7(a) Loan Guaranty
According to this program small companies (both new and existing) can get a guaranty from the official government organization to increase their eligibility to get loans. It means that there can be some situations when you apply for a credit but bank or other financial institution doesn’t want to finance your business for some reasons. Why can this happen? Maybe the banker doesn’t believe in your business idea or your professional skills to realize it. Maybe you don’t provide good collateral from bank’s point of view… Anyway they don’t say NEVER but need something extra to change their negative decision.
The procedure is rather simple. Small-business company turns to SBA, and they guaranty the loan given by commercial lending institutions. It’s important to say that even after that guarantee bank or financial institution is not obliged to give you a loan. But most American banks do, and there are some financial institutions that lend money to small business only under SBA guaranty. 

It’s a very flexible program as SBA will guarantee to loan for a wide number of business purposes. As they say you can get financing for:
-working or operational capital (it’s very essential for retail business to purchase the initial range of products);
-machinery, equipment, furniture and fixtures (usually the largest part of start-up capital);
land and building including purchase, renovation and new construction (as I think this one is not so important as you can get a loan through normal lending channels because real estate is a good collateral and most banks and financial institutions agree to finance them);
-leasehold improvements (not very important as it’s a usual practice when franchisor provides this, but it not than you can apply for this too);
-and debt refinancing (under special conditions).

The loan maturity differs for different purposes. For example, the maturity of the loan for working capital is up to 10 years, but generally up to 25 years for money spent to purchase  real estate.
(to be continued)

The first time I thought about religion and business after reading one of the fundamental books in management science “Management” by Michael H. Mescon, Michael Albert and Franklin Khedouri. The authors used the example of the Rome Catholic Church to explain that sometimes traditional organizations can exist without any improvements in management for centuries. I returned to this example more and more thinking about what would happen if the leaders of the Rome Catholic Church decided to make that changes (I mean only business and management spheres, and maybe personnel motivation or some marketing but nothing concerning religious doctrines). Will the organization operate better or worse? Will more people choose Christianity from other religions or Catholicism instead of Protestantism or Orthodoxy or other Christian direction? And in general, will more people start thinking about attending any church? Will using business instruments attract or antagonize people?..
 

Today I see a lot of churches from different denominations using business instruments. It works. They advertise on TV and radio, issue posters. They train their stuff to be good managers. They use interesting and sometimes even intrigue titles for sermons to attract different groups of people (more churches started teaching about money, business and investments). But what I wanted to emphasize they use franchise strategies to expand their influence.
 

Certainly, I do not want to say that this was invented in the 21st century. Mentioned before Rome Catholic Church has the outstanding number of congregations all over the world. And they continue to open more and more. But the main difference as I think is hidden in the procedure of opening the new ones. The initiative comes not from the leaders but from the prospective pastor. The leaders of the church motivate people to move to other cities, towns and countryside but the final decision is made by particular believer. The main church like ordinary franchisor provides him with start-up and current training, helps to solve technical problems and so on. The subsidiary church pays a royalty (usually it’s 10%), and everybody is happy.
 

Is it good and bad? As for me I think that it’s more likely good because being a part of a big church chain the young pastor has fewer opportunities to fall into heresy…

I hope to finish commenting franchise survey carried out by Franchise Recruiters Ltd. (FRL) today. If you read till the end you’ll know if I manage to do it. Check my previous article to know the beginning.
 
The next idea expressed by top franchise leaders was dedicated to old and branded franchise systems. In order to remain in a good position they have to prove that they are worth of it. Nothing can guarantee them a success in today’s fast-changing world. To hold their loyal customers they need to revamp, rehabilitate and regenerate their business systems. The respondents pay attention to the fact that most of the franchisors are concentrated on their first ideas rather than looking ahead an opening new products and technologies. It’s clear that they will face a rigorous competition.
As it’s mentioned it’s very important to adopt franchise business to demographic trends. Changes in today’s lifestyle and demographics help the development of the following business spheres:
-adult and senior day care,
-health care,
-home care,
-beauty, skin, aging treatments, and spas,
-different forms of entertainment.
 
My comments:
The survey shows the contradiction between main strategies of consumers’ behavior. These strategies are widely used in marketing while speaking about market segmentation. It’s evident that there are different types of people buying the same product. Each group of buyers has different reasons for purchase. The ones are driven by fad, fashion, and mood. They usually want to try something new. The others are very traditional and don’t change their tastes so fast. So if franchisor wants to develop his business he needs either choose the one group or to satisfy both.
The industries mentioned by respondents are rather predictable. There can be a lot of reasons why people become more self-oriented (exactly “self” not family- or community-oriented). Maybe this happens because of decreased role of Christianity and other constructive religions in the society in general. The advertising also influences the modern mentality saying that YOU are worth of this or that. Anyway the picture is very clear. People don’t want to take care of their parents and children themselves. Career plays the biggest role in dreams and aspirations. So the winning strategy is to provide people with more free time and with additional career opportunities (like better education on the one hand and better appearance on the other).
 
All the previous statements were dedicated to franchisors. But what about franchisees? The survey respondents decided not to avoid them. In the answers they pay attention to the fact that today prospective franchisees are “better capitalized, have better management experience, better education, and are increasingly diverse investors”. Also it was noticed that more and more seniors are coming into franchise business. They do not want rely only on government and social security. But most of them are not so aware in their talents to invent good and enough modern business idea themselves. The survey provides the following statistical information about older Americans: “the number of workers age 55 and above rose to nearly 24 million in 2004, up from 22 million in 2003, and from 20.7 million the year before. At the same time, the government is forecasting a significant labor shortage nearing the end of this decade. Franchisors tell us they want and need seniors as a reliable work force for years to come”.
 
In the same survey we found interesting information about so-called third party, not a franchisor and not a franchisee… For example, respondents notice that investors are considering franchise sphere to become rather interesting deal. They even called this a “new golden goose”. Why? Because of very short start-up period in many spheres. Think of it! Franchisor provides with a training program that lasts for 2 weeks. During the same time it’s possible for a franchisee to make all other necessary arrangements and he is ready to start! The only thing that can slow him down is money. So for both of them – investor and prospective franchisee – the goals are coinciding. They can start earning money very soon. TIME! It explains the investors’ interest toward franchise sphere, as I think.
 
Another third party is employees. Both franchisors and franchisees understand that employees contribute the biggest part to the company’s costs (directly and indirectly) and as a result to the company’s profit. When I say direct impact I certainly mean salary and corresponding expenses. As an example of indirect impact I will mention training expenses for every new employee.
At the same time for many businesses employees’ productivity influences the results most of all. That is why survey respondents expressed the opinion that franchisors of the next years will pay a lot of attention to different forms of health care insurance to their chain’s hourly employees. Also they will help to establish relations with banks opening accounts and contacting with financial institutions.
 
My comments:
I like this. When I’ve read this information I was thinking about inventing a high school program (or even senior school) to help franchisors and franchises to provide teenagers with the necessary information and to prepare them to their future jobs in that sphere… It can be based on “learning by doing” ideas and include a lot of practice…
 
And finally the last tendency was related to management. The top US franchise leaders believe that the previous years’ tendency will continue and more managers will be motivated not by strict annual bonus payments but by some reward programs depending on the results. As I understand that tendency is not a franchising innovation but overall trend in business.
 
Ok… I’m done with this survey. Will I get any comments on my comments?..

Ok, I’m back to continue writing about Internet and computer franchise opportunities. Last time I was so busy that I managed to write only about the first – providing web-services. So, now I’m going forth.
 2. On-site computer services will be the next idea to write about. The franchisee has to hire a specialist(s) in the technical sphere. Usually it’s not necessary to have prior experience in computer repair because franchisor will provide all the training. For example, Geeks On Call® Company says:
“Everything starts with “Geek University,” which is an in-depth, weeklong training program”
 

The benefits: the market of home and office computers is rather big and it’s growing; franchisor provides training and some other useful stuff for start-up (business plan, results of marketing research and so on); you can reach small business owners and households large service-centers are not interested in.

The potential losses: the competition in the industry is very tight; every technical specialist with even little experience in computer-repairing can provide the same services himself anв for lower cost (as he doesn’t have to pay royalty and other payments to franchisor).
 (to be continued)

“We are not so rich to buy cheap things,” the proverb says. Is it right about buying a franchise? Maybe… But before choosing between the high-cost and low-cost franchise in the same industry, I suggest you to think over the following information.
 

When you buy the low-cost franchise, the franchisor will never provide the same start-up assistance, training, advice or preferences as if you were investing in the high-cost franchise. So, one of the first questions you have to answer to yourself is to decide what assistance you REALLY need.  If you are a complete novice at this business, I think that it would be better to get a bit more (and to pay more too). But if you are only expanding your rather successful business, the information and assistance (that every franchisor must provide) may be absolutely enough for you.
 

So, it means that you have to know what help you’ll get for sure according to legislation. All the rest depends on franchisor’s willingness.

According to the FTC, franchisors must provide:

1. One copy of the Uniform Franchise Offering Circular. You’ll get it in at least 10 days before you sign the agreement
   
2. One copy of the franchise agreement, other contracts and franchisor’s financial statements with estimates of initial start-up costs (operation capital, equipment, construction and rent costs and so on)
   
3. At least one week of practical training for you and your manager in a parent company
   
4. Operational manual
   
5. Ongoing support
   
6. Guidelines on audits and assignment procedures
   
7. Other criteria for assignments, such as ownership rights and rights to sell the franchise
   
8. Initial fees, royalty and other costs information
   

At the same time your potential franchisor may provide some additional help. You need to take into consideration that this usually increases your payments. This additional assistance may include:

1. A marketing plan, promotional materials and site selection assistance
   
2. Adequate insurance for fire, inventory, burglary, workers’ compensation, accident and health, occupancy and general liability
   
3. A known trademark or service mark, or advertising to make it known
   
4. Guidelines on purchasing inventory and equipment, restrictions on goods sold and terms of agreement and renewal
   

The last word about “must” or “should”: remember that in different states and countries the franchise legislation is different. Spend some time to check your rights as a franchisee. And maybe you will change the proverb for yourself: “We are not so rich to buy high-cost franchising and to pay for the help that we don’t need!”

Economists say that there are 4 main sources to get personal income. They are:
-income from work or salary and wages;
-income from providing services (like private dentists, lawyers, brokers and so on);
-income from business;
-income from wealth or investment.
Each of these variants has advantages and disadvantages at the same time. But many financial consultants agree that a person can get much more money from business and investment. As I think that’s the main reason why many people decide to start their own business without any preliminary education or experience. And the same reason pushes them to buy a franchise license as they often hear and read that it’s the easiest way to start-up.
At the same time prospective entrepreneurs checking franchise opportunities will easily meet the statistics which shows that franchisees seem to operate much better in comparison to stand-alone small businesses. So, I studied this question a bit and decided to write a few words.  It seems to me that there could be some hidden reefs while interpreting the numbers on average franchise activity.
The main reef is the way of collecting the information. In most cases it is a survey! Not tax or bank information but just survey! This means that there is the group that the survey is trying to identify, and the franchises that have left the business or resold it are excluded from the survey because it’s almost impossible to reach them…
Just think about this. Franchise Associations are sending questionnaires only to existing franchisees. And as they still exist it means that they operate successfully. And vice versa… those who lost their business and their money are excluded from the survey. So, the results of such survey are better than real figures. And only the franchisees who became bankrupt but couldn’t get rid of their franchises will worsen the picture.
So, thinking about buying the franchise it’s necessary to remember that when you start you business it’s only your decision. Nobody has an incentive to brighten up your future. But the franchisor gets money directly from you, it’s his business. So, he has an incentive to promote his franchise…

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