Franchising Business

Sunday, March 21, 2010

The History of Franchising - The Creation of the Franchise Business

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The franchise business has been around a long time, in fact they go back as far back as the 1850's. The notion of selling off a business or a part of a business in order to expand into new areas usually came from the lack of investment funds from the business owner.

Through their creativity they were able to keep the business alive by selling franchise opportunities to would-be entrepreneurs.

While the business of franchising has grown over the years it all had to start somewhere. The concept of franchise businesses began with none other than the sewing machine manufacturer, Singer.

The Singer Franchise Business Opportunity

In the 1850's the Singer Company produced sewing machines but didn't have enough capital to actually pay their salesmen salaries. Instead, they created a network of dealers. These first franchise owners paid Singer a fee to work in a particular territory and earned money for each sale of a sewing machine they bought from the company and resold.

Their significance in the start of the franchise and the opportunities it created came from the creation of the contract that is still used today between the original business owner and the new entrepreneur. Many feel the contract was what really sparked the creation of franchises in the future as it allowed business owners to keep some control over how the franchisees were run.

The Coca-Cola Company Franchise Business Opportunity

When Coca-Cola was originally created, it was only sold as a fountain drink. In 1899 two men obtained a short 600-word contract and the permission to bottle the soda.

Thomas and Whitehead soon realized that even though they had a great idea, they couldn't afford to actually create a bottling company. As an alternative, they created a franchise company selling the right to bottle the product to individual bottling plants.

The KFC Franchise Business Opportunities

One of the most famous start-ups in the franchise industry was Kentucky Fried Chicken. The franchise opportunity began when Harlin Saunders, or the 'Colonel' was about to go under. His business started to fail when a highway was created seven miles away from his restaurant. With his business going under, Sanders had to find new ways to get his famous chicken to people.

When Sanders finally lost his business, he went practically door-to-door to sell his chicken recipe. His popularity improved with time and within a few years he had restaurant owners coming to him. He set up franchises and today there are over 10,000 KFC restaurants all over the world.

Companies Leading The Way For Franchise Business Opportunities

The establishment of KFC and others like it led the way for businesses to expand all over the world. It also gave the opportunity for new entrepreneurs to find the path to success. Many of KFC's first franchise owners became millionaires. People who joined in with similar companies like McDonald's also found success.

Thanks to these companies, we now have the opportunity to share in the success of other businesses and business owners have the opportunity to expand their dream. By reaching out to others, they can build a franchise empire out of a business opportunity.

Bill Younger is a writer for Dale Carnegie Training which provides business training franchises. For more information visit http://www.dalecarnegie.com

Article Source: http://EzineArticles.com/?expert=Bill_Younger

Labels: franchise business, franchising business, history franchising

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The Advantages and Disadvantages of Franchising

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Franchising is a great option to take if you're looking for a new type of business to invest in. While it has many advantages, you must know that there are certain drawbacks as well.

Remember that not everyone can successfully run a franchise; sometimes no matter how great an entrepreneur is, he or she may fail not because of a lack of skills but a franchise simply is not the right type of business for them.

I suggest that you should first find out more about franchising and decide whether it's suitable to your needs and preferences. To help you with this, I've prepared a list of the pros and cons of having a franchise:

Advantages of a Franchise

• You get to have your own business in only a short period of time, usually 3-6 months depending on the type of franchise you bought

• You can have your own private location so you won't have to compete with your fellow franchisees

• You won't have trouble attracting customers and making sales especially if the brand you've franchised is very popular

• Advertising is not a big problem because your franchisor will take care of all the promotions for the company products and services

• You have strong connections with clients, suppliers and other professionals because you belong to a powerful network

• There are fewer risks involved and you're most likely to be successful in this type of business provided that you manage your franchise well

• You can make use of your franchisor's financing options if you don't enough capital or simply borrow a loan (loans for franchising are easily approved by banks)

Disadvantages of a Franchise

• You have to comply with all the rules, regulations and standards in order to keep the reputation of the company name you're carrying

• You don't have full control over your business

• You can't make your own decisions because the top management has the final say on every issue, so if you have concerns or suggestions, you have to inform your franchisor first and wait for approval

• You have to give a percentage of your sales to your franchisor every month for royalties, even if your franchise is not doing well financially

• Once you sign the franchise agreement and other documents, you have to finish the term

• You also need to implement the necessary upgrades on machinery and methods required by your franchisor so that all the outlets maintain the standard

Now that you know the pros and cons of a franchise, you should carefully weigh your options before you enter this type of business. If everything seems favorable to you, then go ahead and proceed. However, if you're not a hundred percent sure about the terms and conditions, it's best to find another business that's more suitable for you.

Chad Gordon is a well-experienced franchise consultant whose passion is to guide people in finding the perfect franchise opportunities. Aside from giving helpful advice to clients, he has also been managing his own franchises for several years now. To start your search for the best franchise opportunities, visit http://buyafranchisehere.com today and you may just find exactly what you're looking for!

Article Source: http://EzineArticles.com/?expert=Chad_Gordon

Labels: advantages franchising, disadvantages franchising, franchising