Franchising is the most popular and fastest growing business model in the United States. There are thousands of franchises on the market. A franchise is a business "system" that allows people to share brand identification, a proven method of doing business and a successful marketing and distribution system. The selling point of franchising is that your assets are being put into a proven business. You may have the opportunity for a faster start up, developing a customer base more rapidly, and experiencing profitability with less risk.
With all opportunity there are pros and cons. The pros of franchises are that there is often a proven formula, owner training is available, and there is an ability to thoroughly review past records and company history. The cons of franchises are the royalty and national advertising fees are often significant and continue even though in some cases the ongoing support of the franchise is not stellar. A franchisor may get you into business but what they do after that is probably most important. If you pick a franchisor that does not have a proven system or good name identification what are you really buying? It may also be difficult to pick the right franchise or the right industry given the myriad of choices and sometimes financing options are limited.
If you are considering franchising a good resource to contact is Joe Cooney of Frannet. Joe is the Frannet consultant for Iowa and Nebraska. He routinely holds seminars in the Des Moines area and throughout Iowa. One of these seminars may help you decide whether franchising is right for you.
If you have any questions or need assistance reviewing a franchise agreement or Uniform Franchise Offering Circular you should contact a lawyer. Click here for more information regarding franchise UFOC and agreement review services.