Jean L. Serio

What's the cost of running a franchise you ask? What's involved in the running of one? While these may be the first questions that come to mind, the most important question is "Am I the right person to own and operate a franchise?" Here's a simple guideline, of how franchises work, to help you.

The pros and cons of owning a franchise:

To some, buying a franchise cuts to the chase. No need for research to determine what product or service to sell or develop. Or to worry about pricing and dozens of other things. No need to worry about what types of advertising, marketing or PR to use, or how to develop a brand. But is it really that easy?

1. Franchises are pre-organized businesses. Everything is set for you. There's usually little room for your own creativity or to make changes. You follow the rules and policies developed or risk being terminated.

2. You're purchasing the rights to operate this business. So you're called the "Operator".

3. Purchasing the rights to operate a franchise isn't a guarantee of: making a specific amount of sales, creating a profit; you'll be capable of finding and hiring the right employees; that you have the proper skills to operate it.

4. While most established, branded franchises provide training, there's no guarantee this training will help you create success or profitability.

You'll sign a 15-20 year agreement for a specific location. The business is situated there until that agreement ends, regardless of what develops or changes in and around the area in which your franchise is located.

And while other entrepreneurs have the flexibility of making their own rules and all of their own decisions, franchise owners have pre-set rules and regulations to follow. In the U.S., many set by the Federal Trade Commission. Aside from that, some U.S. States, perhaps even your local government, have statutes regarding developing, selling or running a franchise.

Investing in a franchise:

Prices for franchises can run into the hundreds of thousands of dollars. Plus there are additional fees above and beyond the franchise purchase fee. Aside from the initial franchise fee, here are some additional costs you can possibly expect to pay:

*loan application fees (if applicable); *operator's license and other permits required by your local or state government; *building and or construction expenses (if applicable) or commercial leasing fees; *equipment and inventory; *business liability insurance; *legal fees; *royalty payments; *employee benefits and payroll taxes; *municipal, state and federal taxes; *utilities; *Internet connections; *office, restroom and other necessary supplies; *loan payments (if applicable); *local marketing and advertising; *ad fees paid to the franchise headquarters for general franchise advertising; *accountant and accounting fees; *cleaning or trash services; *security equipment; *any other services it takes to effectively run your business.

Some important questions to ask before investing:

- Can you live with the inflexibility of many rules and regulations?

- Do you have the knowledge and necessary skills to create success? Or willing to invest in obtaining them?

- Do you have the good health and energy to successfully perform the work?

- How many hours a week are you willing to work? Are you willing to give up personal time if necessary?

- Do you have enough money to carry you through the start-up phase? Or capable of securing a loan, using available credit?

- Will your income be paid out of business funds? Or have you savings or other income to help pay personal expenses thru startup phase?

- Have you talked over buying a franchise with your spouse, significant other or children? Are they on board with this decision?

Some final considerations:

While there is much to be said for franchises, you must sift through both the good and the bad to decide if one is right for you. Although expenses are high, franchise fees steep, most established and well known brands, usually provide training. So you'll avoid the the trial and error experience requires. Not only will your franchise have instant brand recognition, but the cache' which comes with it. And, frequently, there's a general fund used for radio and television advertising for all franchise owners. In some cases, maybe local advertising for you.

Don't accept info a franchisor provides as gospel. Do your homework. Go online, to the library, check out franchise magazines and periodicals, franchise organizations. In the U.S. Check with your state Attorney General's Office to discover whether they have any law suits pending, or other legal problems.

Franchises are complex. Hire an experienced lawyer familiar with them. First, to review the paper-work; second, to get answers to any of your questions. And an experienced franchise attorney will clearly explain what's involved before you make the decision to sign 15-20 years of your life away.

Remember, you'll own a franchise for one-third of your lifetime. Be very sure it's not only what you want -- but you're capable of and willing to do whatever it takes to make it a success. These are just a few guidelines. Do some serious research of your own before signing on the dotted line and investing your hard-earned money.

Jean L. Serio Copyright 2007. Are you one of the 1.2 million women tired of working the 9-5 grind, sick of worrying about making ends meet? As you know, starting your own business still remains one of the best strategies for providing your financial freedom. Discover how to start your own business today, and receive your simple, step-by-step Action Plan. To ensure you receive all the details FREE, and learn how to harness the power of other successful women, plus receive hundreds of essential resources needed to start, first sign up for your Free Newsletter "Start Up A Business Today" . Go to: www.womensmarketingandbusinessnetwork.com "We help you make it happen!"

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