Benefits of Operating a Franchise Business

Rather than starting to build up a new limited company, many entrepreneurs consider purchasing and operating a franchise. A franchise has proved to be the quickest way of setting up a business without starting from scratch. Franchising has become popular all over the world mainly because of the fact that it helps people find business opportunities. When deciding to run a franchise business, it is essential to evaluate the value and benefits of operating a franchise business. The following are some of the benefits that you get.

Low Failure Rate

Operating a franchise business means you are running an established concept that’s been successful. Recent statistics show that franchise businesses have a potential of 80% in achieving success compared to
managing independent companies which have a 70% chance of surviving.

An established brand

Operating under the banner of a franchise, enables you to take advantage of the previously known brand of the business. It typically means there will be far less cost and work put into trying to build and establish the brand of the company. Getting customers from the market will be easy since you are already known and trusted in the market.

Simple Business Financing

It is one of the benefits of operating a franchise business that attracts independent entrepreneurs. Acquiring finances from other stakeholders is generally not easy. However, in a franchise business, it’s easy since investors will be far more willing to invest in a company with a secure brand and active network.

High Buying Power

A franchise business will always have the benefit of having
a collective buying power. It means if you are the franchisor operating the franchise business, you can quickly afford to buy products and services in bulk and pass the savings to other franchisees in that business. The supplies and inventory will definitely cost less than when operating an independent company.

Established Business Relationships

Business relationships play a significant part in the success of any business. In a franchise business, there is less hassle of booking for better business relationships. For instance, relationships with suppliers will already be in place and most importantly easy to manage. The
advantage of the already established relationships with marketing and
advertisers team makes it easy to operate a franchise business.

Excellent Support and Security

Security and support systems are a must requirement in any
business. When setting up a business, you will probably run up and down trying to hold training schemes aimed at securing the business. When operating a franchise business, it’s completely different. In a franchise business, they have established training schemes that deal with management and security of accounts belonging to the franchise.

Expands Your Brand Geographically

If you are looking to get your brand to new regions, then try operating a franchise business. It is one of the benefits of operating a franchise business that gives you an opportunity of reaching to new areas that you could not reach. Through this, you have an excellent chance of expanding the reach of your brand to new regions that could increase your revenue.

Mistakes to avoid borrowing money

Mistakes to avoid borrowing money

There are many issues which affect people during the financing process. The following are some of the mistakes that clients make when they are borrowing money. You should always try as much as possible to avoid them to get a better deal.

Working with different brokers

Most people believe that this approach can help them in generating more market coverage. However, working with more brokers does not guarantee you more offers or better deals. In fact, having the same form loan application form coming different people means that there is no one who is in control of that deal. A lender will not put a lot of effort in such cases. As a borrower, you are advised to do be very diligent when applying for a loan. Checking the references will help you in choosing a reputable, well-staffed and a knowledgeable broker. You should engage these brokers for a specified period to obtain the best structure and pricing.

Failure to negotiate effectively

The term sheet or the initial offer letter for commercial mortgages is short, but it has fine details. Any significant points should be brought up at the early stages when you are negotiating for a better deal. It is difficult to modify the deal terms at the later stages once the loan is approved.

Borrowing money that you cannot pay back

You should avoid asking for a big loan or money that you have not planned for as this can land you in trouble. Borrowing a higher amount of money will attract a higher interest rate thereby raising your monthly payments. Always ask for a loan that you can repay easily.

Failure to consider the available loan products

Most people are used to dealing with one or two lenders whom they feel comfortable with. Such people should overcome this habit whenever they are refinancing an old property or when they are acquiring a new loan because the financing market is ever changing. Someone can determine the best move by scanning the overall landscape. By so doing, you will find many products that are fit for your business.

Dealing with the wrong attorney

Some of the borrowers prefer using their family members or friends who are lawyers when making some useful transactions. This is something that you need to avoid. Hiring a seasoned pro will help you in getting a better deal. You might also be charged a penalty or additional fees because of hiring an inexperienced lawyer.