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Is Franchising Right for You?

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If you're looking into starting your own business, consider franchising as an option.

Through a franchise, a person or group of people (franchisee) receives the right to market products and/or services using the trademark or trade name of an existing business (franchisor). The franchisee usually pays a licensing fee, uses particular operating methods and has an ongoing obligation to pay the franchisor a portion of revenue. In return, the franchisor offers advertising and marketing, training, and potential financing of the business.

You may be familiar with "business format" franchises, such as KFC, McDonald's, GNC, Marriott Hotels, Supercuts, McDonald's, and Century 21. You'll find typical business format franchises in industries like fast food, restaurants, business services, automotive, maintenance, and lodging.

There are also "product distribution" franchises, which offer a particular product for sale, usually found in these industries: automobiles and auto repair parts, vending machines, computers and items at convenience stores. Familiar brands using the product distribution method include Coca-Cola, PepsiCo., the Ford Motor Company, and John Deere.

According to the 2007 economic census (US Census Bureau), more than one in every 10 U.S. businesses is a franchise. As in any endeavor, there are pros and cons associated with starting up a franchise.

Interested in getting started?

Get educated, review resources, and find first-hand information to help with your decision.

Resources:
U.S. Small Business Administration Small Business Planner / Buy a Franchise
http://www.sba.gov/smallbusinessplanner/start/buyafranchise/index.html

Inc. Magazine / Franchise
http://www.inc.com/resources/franchise/

Entrepreneur Magazine: Franchise 500®
http://www.entrepreneur.com/franchise500/index.html

WorldFranchising.com
http://www.worldfranchising.com/

International Franchise Association
http://www.franchise.org/AboutFranchising.aspx

U.S. Census 2007 Economic Data
http://www.prnewswire.com/news-releases/census-bureau-news----census-bur...
 

Case Study:
SupercutsSupercuts, fifth-ranked on Entrepreneur magazine's "Franchise 500®" list for 2010, is the top hair-care franchise in the United States. The Regis Corporation, parent company of Supercuts, offers the following reasons to choose this franchise in the hair care industry:

1) Hair care is a fundamental service in any community and any economic climate - it is always relevant
2) Most people choose not to "do it themselves"
3) Employees are educated, certified and trained
4) Resists technological obsolescence
5) Low, non-perishable inventory requirements
6) Cannot be outsourced
7) Hair care is about making people look and feel good about themselves

Hair care is a high-demand, high-repeat cash business: in choosing to work with Supercuts, potential franchisees benefit from national advertising that creates brand recognition and value for each local salon.

About the Franchisor
SupercutsSupercuts is owned by Regis Corporation, a Fortune 1000 company with 13,000+ salon locations, in business since 1922. Supercuts is Regis Corporation's flagship franchise brand, with over 2,100 locations throughout North America.

Gary Grace, president of the Supercuts Franchise Association, says "This franchise has a tremendous, built-in support system that is hard to create on your own. We have strong leadership, attend conferences, share best practices and even have an online community bulletin board where we post questions, help each other out, and offer advice. Overall, this recognition reflects how well we all work together – from each Supercuts stylist to our franchisee network to Regis Corporation and their support."

Requirements

A potential franchisee must have the following qualifications:

  • $150K net worth minimum
  • Some business experience
  • Willing to open multiple units (Minimum of 3)

Have questions about opening a Supercuts franchise or want to learn tips from current business owners?

http://www.RegisFranchise.com - for information about becoming a franchisee
http://www.twitter.com/MySuperCuts - Twitter feed
http://www.facebook.com/Supercuts - Facebook fans

 

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