Franchising

Despite volatility and uncertainty in the South Africa economy, "franchising" still remains a viable option for Entrepreneurs wanting to generate a good income and create some job opportunities for the unemployed.

1. Franchise Sectors                                                                                    

  • Agriculture, mining, manufacturing and Industrial services.
  • Automotive products and services.
  • Childcare, Education & Training.
  • Fast Foods & Restaurants.
  • Health, Beauty & Body Culture.
  • Retail & Direct Marketing.
  • Personal Services.
  • Real Estate, Property and many more ..........

2. Franchise Description 

A "franchise" is a joint venture between a "Franchisor" and "Franchisee".
Franchisor - the franchisor is the original business. It sells the right to use its name and idea.
Franchisee - the franchisee buys this right too sell the franchisors goods or services under an existing business model and trademark.

3. Pro's & Con's of Franchising  

Pro's:                                                                

Instant Name Recognition - Franchises come preloaded with a name that people know and trust. Getting customers to recognize your brand is an incredibly difficult slog, but a franchise has a name that is recognized nationwide.
Training Program - Franchisees can get help bringing new hires up to speed on how everything operate. This include on - site training, daily operations, operation manual, using technology etc.

Marketing & Advertising - Franchises will promote your business via nationwide campaigns that are broadcast on TV, Radio and even online. They may also provide, depending on their size and resources , a marketing plan that covers a market analysis, strategy, sales forecast and budget.

Increased Purchasing Power - The franchise may buy large amounts of equipment and inventory on behalf of franchisees, meaning they will obtain important assets at reduced costs. 
Easier access to finance -  The biggest barrier to buying a franchise is, of course, get the required funding. Securing financing is never easy but investors and banks are more open and lenient in providing funding to franchisees because of a lower risk of failing and they know franchises have the support and the back up of franchisors.

Con's:

Franchise Rules - Business owners love being their own boss, but for franchisees that is simply not the case. They will be required to follow the rules, regulations, system operations, operational manual and directives of the franchisor.
Royalty Payments - You will have to pay monthly royalty fees to the franchisor for using their name and systems and also contribute to marketing and advertising costs at their discretion.
Contractual Agreements - When you agree to buy a franchise , you will have to sign certain contracts such as a "Franchise Disclosure Document" or "Franchise Agreement", that will list all the things you can and cannot do as a franchise. If you break some requirements/rules you could lose your business altogether.

The popularity of a franchise business model has to do with its proven track record of success and the ease of running your own business. While the success rate for franchise owned businesses is significantly higher than for independent businesses, no franchise business is guaranteed to succeed. Do your own research first before deciding on the franchise route and also decide how much money you are willing to invest in the opportunity.
You can also consult with your attorney to assist you with understanding all the ins and outs of the specific franchise contracts. The help of a professional and experienced business plan writer consultant in helping you to develop a proper business plan and financials will ensure you start on the right foot and will make the way to find funding for your business much easier.

FUNDING TO BUY YOUR FRANCHISE

To secure the required funding to buy your franchise the creation of a proper and well - structured Business Plan is crucial. Although some Franchisors will provide you with a "Disclosure" document and a sample/ generic business plan they do not meet the requirements/ criteria of investors due to the lack of some vital information. Investors/Banks use your Business Plan to assess if the franchise you are buying is on a path towards success and profitability and the viability of the franchise operation.

Our Franchise Business Plans are bankable, well structured and meet the requirements of all Investors/Banks. Contact us now for more information and professional franchise assistance:

Email: money@global.co.za or give us a call on 084 583 3143