Contemporary Entrepreneurship Purchasing a Franchise

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Contemporary Entrepreneurship Purchasing a
Franchise

• Ron Runyan, Presenter
• ROP Business and Computer Applications

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Purchasing a Franchise

• Definitions
• Franchising- method of doing business where a
  franchise is guaranteed the right to engage in
  offering, selling, or distributing products or
  services within special marketing format.
• Franchisee- person who buys a franchise
• Franchisor- person or company that offers the
  franchise to others
• Royalty- ongoing fee paid to a franchisor at
  specific intervals (often percent of gross
  revenue or net sales)

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Classifications

• Automotive products/services
• Business aids/services
• Campgrounds
• Clothing/Shoes
• Cosmetics/Toiletries
• Dental centers
• Educational products/services

• Employment services
• Foods
• Motel/Hotels
• Printing
• Real estate
• Security systems
• Vending

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Advantages

• Provides an established product or service
• Management and/or technical assistance
• Consistency and quality control
• Less operating capital opportunities for growth

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Disadvantages

• Expected services not in contract
• Franchisee required to pay franchisor for a long
  time
• Heavily dependant on advice from franchisor not
  diminishing w/time
• Restrictions placed on contract by franchisor
• Franchise contracts control the terms of the sale
• Chain stores can carry the stigma of success or
  failure with them

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7 Mistakes That Can Kill Your Business

• Running out of cash
• Need a cash-flow budget
• Not knowing your customer
• Customers preferences
• Competitors products
• Who are they? What do they want now? What will
  they want next?

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7 Mistakes That Can Kill Your Business

• Doing it all on your own
• You may be the key but cannot DO everything by
  yourself
• The right person at the right place at the right
  time at the right price
• Ignoring employees
• Motivating and managing employees
• Unresolved problems can destroy morale,
  productivity, and profits

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7 Mistakes That Can Kill Your Business

• No business plan
• Need a written plan instinct is not enough
• Computer chaos
• Help or hindrance
• Ignoring the numbers
• Goal is to make a profit must be able to record
  and analyze key ideas