This article are provided for information purposes only, and are not intended as legal advice.

Franchises – more profitable than independent businesses?

November 25th, 2008

Franchises may or may not be more profitable than a regular business.  It depends on many factors including, the management skills of the owner, the location, the product being sold, the brand recognition, if you are appealing to a mass market or just local people.  Franchises may be more labour intensive than a non franchise business but again, this depends on the type of franchise/business.

if you have a problem and do not know how to do it, you can talk to the franchisor or other franchisees.  I have seen many franchisees help each other, sometimes doing joint buying from the supplier, particularly if they are cross border transactions, why pay the import broker multiple fees for processing two small orders when you can consolidate them and save on the fees.  This is just one example of assisting each other.  Determining product mix is also another.

if you own your own business, you can increase rates whenever you want to.  Whether the customer accepts the rates if a separate discussion. In a franchise, all locations have the same selling price even if they operating costs from one location to another are significantly higher.

Filed under: Buy a business,Franchises — Gary Landa @ 8:39 am

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