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Jakarta - Many people think a franchise business is a definite step towards success. But in fact, many reasons that make business franchise did not end as predicted.
In the article quoted from Investopedia, Tuesday (01/16/2012), we will look at some considerations that you can examine before plunging directly into the franchise business.
1. Initial capital and franchise royalties high enough
Initial capital and franchise fee income tenants can greatly affect the franchise business. For example, if you want to open a McDonald's franchise, you must have its own location (leased or owned), not to mention royalty franchise around Rp 405 million (U.S. $ 45,000) to hold the franchise rights for 20 years, after his time runs out then it could be extended.
If the count is calculated in total, the price you have to spend to open a McDonald's fast food restaurant ranges between USD 4.5 billion up to Rp 14.4 billion.
The most troublesome is that the franchise fee to be deposited per year. Each year, the holder of the franchisee shall deposit 12.5% of turnover to the franchisor. So, regardless of your turnover or as good as any business, you will continue to be bound by this rule.
This annual rent is the most standard requirement in the franchise world. In fact, Burger King asked for an additional 4.5% if the cost of franchises reached USD 450 million, the same as Dunkin 'Donuts is asking for an additional 5.9% for franchise fee in the range of USD 360-720 million depending on location.
Reduced employee salaries, meal allowances and taxes, can be seen that holds the franchise license is not as easy as it seems.
2. Expensive raw material costs
For you can stay in business, most franchise owners to force the licensees to purchase raw materials from suppliers that are usually present relationship 'special' by the franchisor. Usually, the price set by the supplier is higher than market prices.
In fact, some fast food franchise owners set a 5-10% higher than market prices for products such as vegetables, tomatoes or other raw materials. In fact, the vegetable remains of vegetables that cost is usually about the same, but it became one of the owners of the franchise in other ways to boost earnings.
Never once you cancel the order raw materials from the franchisor, because it is not impossible that he's cut off your contract in the middle of the road so you no longer can do business.
3. The lack of funding
Most franchise license holder does not have access to funds is good. So, if you need additional capital, mostly franchised licensees must grope his own pocket. In a way, the franchise holder of the license depends on yourself.
Some franchise owners know this so well that it provides an option for the franchise fee payments, initial capital, raw materials and equipment to start a franchise. Situations like this are usually more attractive prospective licensees franchise.
4. The lack of control locations
Some franchises have rules for not too much to open his shop in a town in order to avoid market saturation and turnover plummeted. However, many franchises are opening stores in a city as much as possible in order to boost sales.
That is why it is not something weird if you look at the five McDonald's outlets within a radius of 8 km as the company tried to scoop up all the money in the region. Franchisors are able to gain a lot, but the suffering is the licensor's franchise outlets, since each appears one franchise in the same location, then the turnover could fall by half.
5. Less creative
Sebauh franchise usually requires uniformity. Starting from the decor stores, billboards, product offered must be equal to the maid's uniform. For people who like creativity, this can be frustrating.
So, if you are used to being your own boss, this uniformity may be quite difficult. Maybe you are not suitable for business franchises.
6. Franchisors are less familiar with new areas
You'll often hear that the key to success in business is location, location, location. Because the location is very mentukan success or failure of a business.
Essentially, if you can not find the right location to open a franchise, you will definitely difficult, because the franchisor did not get much help you in determining the location.
For example a pizza franchise. You can not easily open a pizza shop in a fairly crowded area residents. But, you also must consider the age level at that location.
One great if you open a pizza shop in crowded environments, but its contents parents. You better find a more quiet environment but the content of all young children.
Research like this is usually not owned by the franchisor. The franchise license holder is on duty to conduct this research alone without the help of the central office.
Conclusion:
Running a franchise business is a serious decision that should be undertaken with caution. Before you hire a franchise, many learn about the company being targeted, as well as product and location. Because even with the product and a good location, not necessarily you can reap a profit. So, make sure adan know the risk before opening a franchise.
(Ang / Qom)
source: detik.com
please give me comments thanks
In the article quoted from Investopedia, Tuesday (01/16/2012), we will look at some considerations that you can examine before plunging directly into the franchise business.
1. Initial capital and franchise royalties high enough
Initial capital and franchise fee income tenants can greatly affect the franchise business. For example, if you want to open a McDonald's franchise, you must have its own location (leased or owned), not to mention royalty franchise around Rp 405 million (U.S. $ 45,000) to hold the franchise rights for 20 years, after his time runs out then it could be extended.
If the count is calculated in total, the price you have to spend to open a McDonald's fast food restaurant ranges between USD 4.5 billion up to Rp 14.4 billion.
The most troublesome is that the franchise fee to be deposited per year. Each year, the holder of the franchisee shall deposit 12.5% of turnover to the franchisor. So, regardless of your turnover or as good as any business, you will continue to be bound by this rule.
This annual rent is the most standard requirement in the franchise world. In fact, Burger King asked for an additional 4.5% if the cost of franchises reached USD 450 million, the same as Dunkin 'Donuts is asking for an additional 5.9% for franchise fee in the range of USD 360-720 million depending on location.
Reduced employee salaries, meal allowances and taxes, can be seen that holds the franchise license is not as easy as it seems.
2. Expensive raw material costs
For you can stay in business, most franchise owners to force the licensees to purchase raw materials from suppliers that are usually present relationship 'special' by the franchisor. Usually, the price set by the supplier is higher than market prices.
In fact, some fast food franchise owners set a 5-10% higher than market prices for products such as vegetables, tomatoes or other raw materials. In fact, the vegetable remains of vegetables that cost is usually about the same, but it became one of the owners of the franchise in other ways to boost earnings.
Never once you cancel the order raw materials from the franchisor, because it is not impossible that he's cut off your contract in the middle of the road so you no longer can do business.
3. The lack of funding
Most franchise license holder does not have access to funds is good. So, if you need additional capital, mostly franchised licensees must grope his own pocket. In a way, the franchise holder of the license depends on yourself.
Some franchise owners know this so well that it provides an option for the franchise fee payments, initial capital, raw materials and equipment to start a franchise. Situations like this are usually more attractive prospective licensees franchise.
4. The lack of control locations
Some franchises have rules for not too much to open his shop in a town in order to avoid market saturation and turnover plummeted. However, many franchises are opening stores in a city as much as possible in order to boost sales.
That is why it is not something weird if you look at the five McDonald's outlets within a radius of 8 km as the company tried to scoop up all the money in the region. Franchisors are able to gain a lot, but the suffering is the licensor's franchise outlets, since each appears one franchise in the same location, then the turnover could fall by half.
5. Less creative
Sebauh franchise usually requires uniformity. Starting from the decor stores, billboards, product offered must be equal to the maid's uniform. For people who like creativity, this can be frustrating.
So, if you are used to being your own boss, this uniformity may be quite difficult. Maybe you are not suitable for business franchises.
6. Franchisors are less familiar with new areas
You'll often hear that the key to success in business is location, location, location. Because the location is very mentukan success or failure of a business.
Essentially, if you can not find the right location to open a franchise, you will definitely difficult, because the franchisor did not get much help you in determining the location.
For example a pizza franchise. You can not easily open a pizza shop in a fairly crowded area residents. But, you also must consider the age level at that location.
One great if you open a pizza shop in crowded environments, but its contents parents. You better find a more quiet environment but the content of all young children.
Research like this is usually not owned by the franchisor. The franchise license holder is on duty to conduct this research alone without the help of the central office.
Conclusion:
Running a franchise business is a serious decision that should be undertaken with caution. Before you hire a franchise, many learn about the company being targeted, as well as product and location. Because even with the product and a good location, not necessarily you can reap a profit. So, make sure adan know the risk before opening a franchise.
(Ang / Qom)
source: detik.com
please give me comments thanks
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1 comments:
If anybody wants to start a franchise business then they have need to study franchise business failure point and know about it be a important for them. If they are familiar with failure point then they can improve their performance and easily handled all situation and get a success.
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