01Jun

Hello! In this article, we will talk about starting a franchise business.

Today you will learn:

• What are the benefits of running a franchise business?
• What is the best franchise business to start.

What is a franchise

Let's start with the main thing - the definition of a franchise.

Franchise - a set of benefits that allow a legal entity or individual to use the company's brand.

More simple:

Franchise – the right to use the brand, technology and experience of a well-known company.

The person who buys a franchise is called a "franchisee". The franchisor is the one who grants the right to use the brand.

That is, the very concept of a franchise implies the purchase of the right to work under the name of a well-known company. At the same time, you can buy not only the brand, but also all the marketing and strategic developments that will allow you to start a business.

Also, most companies are responsible for equipment, choosing a place to do business, developing an initial advertising plan, and many other things that make it possible to succeed.

It is worth talking about advertising separately. Since in most cases you are buying a ready-made brand, the market has already taken care of it. And a developed network of franchises allows you to advertise the same product by several businessmen, which significantly reduces the cost of promotion.

The franchising system is widely used in public catering. The brightest representative is McDonald's. The company has been promoting its services on a franchise model for over 30 years.

Franchise types

Specialists subdivide several types of franchises:

1. classical. The most popular type of franchise in Europe. The owner pays the initial amount for the purchase of the franchise, regular contributions in the form of a % of the yield and operates under close supervision by the franchisor.
2. free. The most popular type of franchise in Russia. The owner gets almost complete freedom of action, an approximate business plan of action and minimal contributions. Characterized by an average down payment.
3. Import-substituting. Creating products that are similar to well-known brands.
4. Full construction. When choosing this model, the franchisor himself creates a business and transfers it to the manager for a fee. The profit is divided depending on the terms of the contract between the manager and the franchisor.
5. Rent. Almost the same as a turnkey business, with the only difference being that the business is leased out for a fixed period.
6. Master Franchise. Purchase of monopoly rights to conduct business in the region. The franchisee has the right to decide how to conduct business. He receives only general advice on how to conduct business, but under this model, intervention from the company will be minimal.
7. Corporate. The owner simply creates under the name of a well-known brand, but makes most of the decisions on his own. The franchisor can only tell him his suppliers, the main activities of the company and the range. The businessman himself is responsible for everything else.

The chosen type of franchise will depend on the number, experience and aspirations of the franchisee.

At the same time, the free form of a franchise is more typical for the Russian economy, in which the franchisor is only interested in the initial payment - the purchase of the brand. For this, he gives a recipe for a successful business, as well as contacts for most suppliers.

This is where the collaboration almost ends. The franchisee and the franchisor will only discuss issues together and promote common goods and services.

But Europeans often choose a stricter classical model due to the fact that it provides constant assistance from the franchisor, and, accordingly, supervision over the quality of doing business. With this option, freedom is lost, and with it the probability of making a mistake.

Pros and cons of a franchise

In order to study the positive and negative aspects of starting a franchise business, you need to touch on statistics. Official data says that about 80% of start-up entrepreneurs are weeded out in the first year. And from the remaining 20 - 15 after 5 years of work.

Of course, this statistic considers the sale of rights, the purchase by large companies and other transactions beneficial for the businessman to be a failure. But the general trend is this - about 1/3 of real businesses are successful with start-up entrepreneurs.

And from here follows the main positive side of the franchise - reliability. In fact, after the purchase, you get a ready-made recipe for how to run a working business. With all the suppliers, the choice of products and services, a multi-year team of analysts and a clear one that includes all the little things, down to the heating requirements of the building.

Buying a franchise of a well-known brand, you will receive a clear plan on how to make a successful business that will bring profit within a few years.

According to official statistics, aspiring entrepreneurs who have chosen a franchising model as the development of their business save up to 5 years for the development of their own company.

Of the implicit pluses, one can still distinguish:

• from the franchisor;
• Availability of trusted suppliers;
• Advertising campaign within the brand.

Franchising statistics are somewhat different than in real business. About 60% of franchise businesses are successful. At the same time, 30 out of 40 were at a loss due to their own mistakes, due to deviation from the franchisor's business plan.

And the remaining 10% incorrectly chose the region for business promotion. That is, if you choose the right region and fully follow the advice of the company, then the business will bring a stable income.

But in addition to the pros, there are several significant disadvantages that can weed out most novice businessmen.

Minuses:

• Price;
• Ease of doing business.

And if everything is clear with the first - for example, it may take up to 30 million rubles to open a small McDonald's restaurant, then with the second everything is not so clear.

On the one hand, everything is simple - there are working tips that must be followed, and the profit will not be long in coming. On the other hand, an entrepreneur will not gain experience by trying different strategies, “filling bumps” and coping with crises.

A franchise business is more like a game according to predetermined rules - do it and you will get a stable business and income. After a few years, you may be allowed to "change the menu" or "add a small shop."

And now we have reached the restrictions and requirements that most franchisors impose on potential buyers of the brand.

If we touch on the most popular - franchised fast food, then there are a lot of requirements:

• To buildings;
• to the staff;
• To the menu;
• To the franchisee.

As well as many restrictions, such as: do not change the menu, train the first employees strictly from the franchisor, buy equipment from such and such a manufacturer, purchase only from these suppliers for the first time, etc. Each has individual conditions, but the essence is approximately the same: do the same, as well-known representatives of the brand.

But at the same time, one should not think that such actions according to the template will be unprofitable. Most large companies that are concerned about their franchisees being successful conduct analytical work, during which they identify the needs of the region, features, which product should be launched, what is the most convenient time for this, etc.

The team will make a full-fledged analysis of how to make a brand successful in an average city or metropolis, what is more profitable to launch in central Russia, and what in the southern regions.

Is it worth starting a franchise business?

From the previous point, it became clear that the franchise has both its pros and cons.

Summarizing all this, it can be noted that:

If you find a good franchisor and follow his advice, you will get a successful business that will bring a stable profit in 90% of cases. At the same time, a number of restrictions are imposed on the businessman, which are set by the franchisor, in an attempt to protect him from wrong decisions.

It follows that running a franchise business is a great way to start your entrepreneurial journey. But working with big brands will require a significant amount of money. Therefore, it is better to start your own business with cooperation with medium-sized franchisors.

For more experienced businessmen, working with large franchisors saves a significant amount of time on project promotion. From 1 to 3 years to get your share in the market and from 2 to 4 to be able to fully gain a foothold in it.

How to start a franchise business

Starting a franchise business is quite easy. It is enough to go through 7 steps, after which you can have a legal and highly profitable business.

Step 1. Determining the sphere

Unlike the countries of Europe and America, where fast food dominates steadily and confidently, franchising promotion in the field of retail sales of non-food products is more popular in Russia.

Then comes the provision of various services and only after that comes fast food. Food retail and occupies 3% of the total volume of the Russian franchising market.

Consider each of the possible areas separately:

• Retail. Represents interaction with major brands that operate in the region. In fact, it will be the purchase of wholesale consignments of goods and retail sales. Outstanding representatives who provide their goods for sale are Lacoste, Oodji. Those who send purchased goods to their franchisees - Sportmaster, Sela, etc.;
• Catering. Everything is simple here. You either rent a place at the food court and sell food and drinks under the brand name of a well-known brand. The menu is chosen by the franchisor, he also provides a database of suppliers, checks the premises and trains the staff. The most famous representatives are Subway, McDonalds;
• Production. The most profitable and least liquid way to invest in a franchise. You can produce under a franchise: vegetables, flowers, bakery products and other similar products. The franchisor most often participates in the creation of production, shares recipes for creation and its channels for selling products in the region. A prominent representative of the production franchise is Pokrovsky bakeries;
• Clothes and shoes of famous brands. Opening stores of famous brands is quite a profitable business. You will sell a range of well-known products in your region, while receiving full advertising support from the franchisor. Basically, you just open a branch store. Well-known brands - H&M, Timeout.

The choice of the field of activity depends entirely on the preferences of the businessman. In each of the segments, you can find both franchises with a small entry threshold - 100-400 thousand rubles, and large giants - from 20 million rubles per brand. At the same time, the sphere of production remains the most difficult, and the sphere of retail trade remains the least demanding on the manager's qualifications.

Step 2. Choosing a specific franchise and completing training

After choosing a niche, you will need to carefully study all the franchise offers. To do this, you can use our. The choice you make will directly affect your profit.

The qualifications of the franchisor will depend on:

• Profitability of the enterprise;
• Stability;
• Competitiveness;
• Demand.

As mentioned earlier, with a good franchisor, you will get a working recipe for a business that will bring long-term income. But a bad partner can only take the money and give a rough plan that contains general instructions on how to create some kind of business.

Signs of a good franchisor:

• brand awareness;
• Availability of a training center;
• Research of the region;
• Availability of supplier base;
• Clear rules and requirements;
• Real profitability figures;
• Investments in advertising.

All these points show the attitude of the franchisor towards the buyers of the franchise. It makes no sense for a well-known brand to sell a low-quality product - including its own name. The learning center indicates that some of the secrets of how the company's business is conducted have not been made public and they still have to learn.

A good analytical team that researches the needs of the region and builds a supplier base speaks volumes about the quality of doing business. Only those who bet on results can afford to invest in information and analysis.

The presence of clear requirements is an invariable quality of a good franchisor. Since he is interested in the franchisee developing and not making mistakes, he will protect him by setting clear requirements.

It is also aimed at maintaining the brand. And investments in advertising mean that, for the most part, at the expense of the franchisor, a businessman will be able to get good advertising for his business and quickly attract customers.

Step 3. Document preparation

At this stage, you should choose the legal form in which you will work on a franchise. There are two options for doing business: as or.

Running a business as a sole trader has a number of benefits:

• Ease and speed of opening.

But at the same time, you will be liable with your property for the obligations of your individual entrepreneur. However, even if you work at a loss, you will need to pay 35,000 a year to the social security fund.

Also, an individual entrepreneur cannot hire a large staff of workers - which can significantly slow down business development.

At the same time, the LLC has one significant plus - in the case of liability, liability can only be collected from the property of the company.

At the same time, LLC has a more complex and accounting system, and has a time-consuming state registration procedure.

When choosing a legal form, it should be borne in mind that when choosing an individual entrepreneur, all types of business related to cigarettes, etc. will not be available to you.

Step 4. Search and refurbishment of the premises

In any business, space plays a huge role. That is why every franchisor has a clear idea of ​​what it should be like for successful business.

When examining the various franchises in the conditions, the requirements for the premises will be indicated each time.

In most of them:

• Volume from ** square meters;
• The presence of a water supply;
• Compliance with all safety standards;
• Various specific features. Varies from business to business.

Some allow their franchisees to rent the premises, while others insist that it be their own.

Most franchisors operating in different regions of Russia have their own bases of suitable premises for each city. You can also use consultants from franchisors who will quickly find a place for business. This is one of the advantages of working with medium and large brands.

Step 5. Purchase of equipment

One of the easiest steps. The franchisor issues contacts of all suppliers, or is completely independently engaged in the purchase and delivery of equipment. Also, specialists can deal with the installation of all equipment. About 80% of all costs are spent on the premises and preparation of equipment before opening your own business.

At the same time, if you work with European brands, you will need to purchase quite expensive equipment, and it will not be possible to buy Russian analogues. And because of the high price, the quality of the equipment will be appropriate.

For example, for German equipment purchased by McDonald's franchisees, the warranty is from 10 to 30 years.

Step 6. Preliminary preparation

The process of preliminary preparation includes: the purchase of goods, the preparation of the premises, the conduct of an advertising campaign and the test launch of the store/restaurant. This process will be led by the franchisor's specialists: their main task is to find flaws and eliminate them even before the launch, along the way teaching the businessman various subtleties of doing business.

It can take from 1 to 3 months to prepare a business in advance.

Step 7. Starting a business

After preliminary preparation, it is time to start the business. For the first time after the launch, the franchisor's specialists and analysts will closely monitor the performance of the store/restaurant. After a few months, the franchisee will have more freedom, for example, to vary the assortment of the store.

After 1-2 years have passed, the franchisee will be able to fully take control of the business and choose suppliers of goods, train employees on their own and build a sales line as they see fit.

That is, over time, any franchisee gets much more freedom, regardless of the chosen form of franchise. Even with the classic model with such a tough franchisor as McDonalds, after 1 year you can change the menu, after a year and a half you can create your own dishes, and after 2 years you can create your own dishes on the territory of the restaurant and next to it.

All about paying a franchise

Now let's talk in more detail about the financial side of the issue.

When selling a franchise, the franchisor has two options:

• Require only a down payment, which will pay off all the costs of assistance in starting a business;
• Require a down payment, as well as monthly (quarterly or annual) contributions in the amount of % of the business.

The franchise fee is called a lump-sum fee. This is a one-time payment, which is calculated from all the costs that the franchisor will have to bear to open a business, as well as payment for its services.

The monthly fee for using a franchise is called a royalty.

There are 3 types of royalties:

• Percentage of turnover;
• Percentage from the markup of goods;
• Fixed royalty.

The most commonly used percentage of turnover - from the amount of income withheld from 5 to 30% monthly, depending on how profitable the business is.

At the same time, as mentioned earlier, if the franchisor charges only a lump-sum fee as a franchise fee, this means that he will be less interested in developing your business.

It will be enough for him to receive a large amount once, give a business plan and leave in an unknown direction, leaving the businessman to deal with his own project on his own.

On the other hand, large royalties can negatively affect the profitability of a business. True, most franchisors take into account the profitability of their projects, so they set quite adequate rates of 5-15% of the profit per month. This makes it possible to earn money from the entire branch network, and at the same time leave them a significant amount of profit.

There is another contribution - advertising. Thanks to him, an advertising budget is formed, which is spent on promoting the whole brand in all regions. Thus, paying from 10 to 100 thousand rubles a month, depending on the volume of business, you will be able to receive full-fledged advertising in your region, as well as increase brand confidence around the world, which also has a positive effect on sales.

Franchise Examples

In the end, let's look at 3 large franchises in three different areas: McDonald's, Pyaterochka, Lacoste.

McDonald's.

Having appeared on the Russian market relatively recently, a large catering giant began to dictate its own, rather harsh conditions.

In order to be eligible to use a McDonald's franchise, you must:

• Have capital from 10 to 40 million rubles, depending on the city and the size of the restaurant. At the same time, at least 50% of the funds must be own, not borrowed. The remaining 50% you can pay within 7 years at a minimum percentage of the company itself;
• Get paid training. Tuition price - $ 10,000;
• Have extensive experience in business or catering.

In fact, in order to open a McDonald's franchise, you must either be an established businessman or have extensive experience in the food service industry.

The McDonald's lump sum is $45,000. Royalties - 12.5%. Payback period - 3-5 years.

Pyaterochka.

Retail grocery stores in Russia prefer to develop organically - not by selling franchises, but by independently expanding production areas and absorbing regional retail chains.

But X5 Retail Group, the owners of Pyaterochka, Perekrestok and Karusel stores, decided to create a franchise network of grocery stores in Russia with fairly loyal conditions.

Conditions:

• Availability of own premises (long-term lease is suitable);
• Positive business reputation;
• The presence of a trading floor from 100 sq. m.

Lump sum - 750,000 - 1,000,000 rubles. There is no legal royalty. But here lies one important detail - according to the contract, the franchisee receives a commission in the amount of 14 to 17% of the store's income. Quite a profitable scheme for start-up entrepreneurs.

The payback period for the business is 1.5-2 years. A great option for businessmen with no experience.

Lacoste.

The most controversial one on this list.

There are few requirements, but they are quite tough:

• Presence of own premises - 100-150 sq. m.;
• Experience in retail sales and own clothing stores.

There are no lump-sum fees and royalties. You will buy branded clothes, shoes and accessories and sell them in your store. The franchisor will need to pay for the products and the mandatory advertising percentage.

The payback period depends on the businessman. The freest franchisor, only for the most experienced entrepreneurs.

These three franchisors show a completely different approach to franchising. One is a classic European with tight boundaries and excellent strategy. The second is a typical Russian, with a rather strange approach in the form of agency fees. And the third is an American, with favorable conditions for himself, who is looking for an experienced partner.

Each franchisor is an individual and a company with decades of experience behind it. Consider all the features when choosing a partner, up to the size of the room and the severity of the conditions.

Conclusion

Starting a franchise business is the most profitable way for aspiring entrepreneurs to start their own business. In Russia, the most popular franchises with investments ranging from 400 thousand to 4 million rubles.

If you have such capital, then literally in 1.5 - 3 years you will be able to recoup all investments and reach an income of 40 to 500 thousand rubles a month.

Let's weigh the main pros and cons of creating your own business through buying the right to use someone else's brand.

Start from scratch or buy a ready-made business?

Many aspiring entrepreneurs have heard the word "franchise", but still do not know what it is. A franchise is a special form of agreement when one party (the franchisor) grants the other party (the franchisee) the absolute right to act on the market on its own behalf. In this case, the latter is allowed to use the trademarks and / or brands of the franchisor. In other words, a franchise is a lease by an entrepreneur of a trademark for the sale of his own goods and services. Consider how profitable a franchise business is, determining its pros and cons.

Franchise Benefits

One of the main advantages is the recognition of the brand that was rented, and it may not necessarily be a world famous brand. There are many franchisors successfully operating within the same country or region.

Buying a franchise is synonymous with the high speed of promoting your own business. If you open a business from scratch, at first you will have to work for the trust of consumers. By purchasing a ready-made business, the company begins to make a profit almost immediately.

The great experience of a franchisor is invaluable for an entrepreneur, because he will not only represent a well-known brand on the market, but also receive all kinds of assistance in the form of training courses, tutorials, and consultations. It will be easier to resolve the issue with advertising.

Having a franchise, the company officially operates on behalf of the franchisor in the allotted territory (its boundaries are specified in the contract). Therefore, she will not have to be afraid of competitors with a similar license.

Franchise cons

The high cost of the starter pack is the most obvious disadvantage, especially when it comes to brand exclusivity. However, exclusivity has a big plus - the entrepreneur becomes the only legal representative of a popular brand in the region.

The next trouble is that the brand acquirer can be placed in a very narrow framework. And this is understandable, because the franchisor wants to develop, and for this he has to follow certain market rules. But such restrictions can simply destroy the entrepreneur's business.

Difficulties sometimes arise in legal relationships. Eminent franchisors usually have a large staff of lawyers. They can draw up such agreements in which the interests of the junior partner will be minimally observed. For a thorough study of documents, a businessman needs to involve his lawyers.

A franchise can become a brake on creative development. For example, if an entrepreneur has a new idea that can significantly develop the business and increase profits, then he will not always be able to implement it. Some franchisors prevent this, citing the fact that the franchise is already a ready-made idea, which is already extremely fine-tuned.

Finally, franchisors often insist on buying the necessary consumables and raw materials only from them or their partners, but not from competitors. It turns out that due to such restrictions, a businessman cannot influence part of his own costs.

To create a franchise business means to enter the market under someone else's brand name, which the consumer already knows. The main advantage of franchising is that you get a “ready-made business” and avoid many of the risks associated with starting a business from scratch.

Another obvious plus is that, despite the economic crisis, the franchising industry in Russia is growing. In 2016, according to the General Director magazine, there are about 1,400 franchises operating on the Russian market, which is 10% more than last year.

What is the best franchise to buy?

To date, the most profitable franchises are in the areas of catering and retail.

The most famous franchising chains in catering are Baskin Robins, Dodo Pizza, Subway and Stardogs. The payback of such a business varies from 9 months to 1.5 years.

The world's largest chain of eateries, Subway, has opened 644 companies in 141 cities in Russia. The franchise is growing rapidly, as it requires a minimum of resources to open one Subway point: there is no hot shop in the eateries, so they launch them economically and quickly.

Clothing, footwear and perfume stores, on the contrary, are less profitable. Given the crisis and the need for large investments, the demand for opening such a business has fallen. However, things are going well in narrower market segments - for example, fixed price stores or express pharmacies.

The fastest growing franchise in the retail sector in 2016 was the Fix Price chain of stores - it has 2050 enterprises in 723 cities of Russia (however, if we talk specifically about franchising enterprises, then Fix Price has only 250 of them). The reason for the popularity of the franchise lies in its low cost: 300 thousand rubles. Another advantage is the narrow niche that the company has occupied: Fix Price is a monopoly in Russia in the sale of goods at a fixed price.

What assistance can a partner expect from a franchisor?

Assistance from the franchisor can be expressed in consultations, staff training, equipment supply, advertising support - the list can be much longer, depending on the business area and the parameters of a particular transaction. For example, in retail, as a rule, the founder helps the franchisee with the selection of a retail outlet, equipment, and staff training.

Thus, the 33 Penguins ice cream store chain helps franchisees choose the location of the outlet, gives recommendations on window dressing and the choice of equipment for outlets, and helps train staff. The company also helps to determine the profitability of the business.

If we talk about the field of public catering, then the help of the founder can go beyond the simple selection of premises. For example, the Dodo Pizza chain of pizzerias opened an entire school for franchisees and developed its own Dodo Is software, which made it possible to optimize the work of 93 partners in 71 Russian cities.

What do the numbers say?

Despite the attractiveness of some offers in the franchise market, it is important to understand that where you pay little, you earn as much. For example, opening a branch of the popular Shokoladnitsa coffee shop costs 12.5 million rubles with an annual income of 6.5 million rubles: this means that the cafe will pay off only after 2-3 years.

There are franchises that require less money for entry, and the profit in the first year of operation covers the initial expenses. On paper, the benefit in numbers looks tempting, but it is far from always embodied in reality.

The starting cost of a franchise, in addition to primary costs such as renting a retail space and hiring employees, includes a lump-sum fee - a one-time payment that the founder charges the franchisee for using the trademark. In the table below, you can look at the ratio of initial expenses and revenues of popular franchises on the market.

A low entry fee due to the crisis is offered by many clothing and footwear retailers, for example, InCity, Sela, Finn Flare. The entry threshold has been lowered as the popularity of such franchises has fallen: people have begun to spend less money on new things. Before acquiring such a franchise in a crisis, it is better to calculate all the risks.

So is it worth it to start a franchise business?

Experts and entrepreneurs interviewed by the "General Director" think so. In 2014 they even turned on franchising in the top twenty promising business areas in Russia for the next 3-5 years.

However, do not think that a franchise business is easy money. Although the franchisor helps, the success of the project is 99% dependent on the conscientious work of the partner. It takes, in my experience, an average of two to four years to break even, and no one guarantees you success.

The good news is that after working on a franchise, new entrepreneurs usually learn the basics of the business and open their own business after a while. If you have such ambitions, the franchise business will be a great school.

1. Calculate in advance how much you are willing to invest in the business, not counting the lump-sum fee;
2. Research the company that sells the franchise (small initial investment and high income should make you doubt);
3. Decide on the niche in which you want to buy a franchise. You should have at least a minimal idea about this business;
4. Discuss in advance what the company will provide you: what support will be provided, for which you will be asked for an additional fee (sometimes this is not written in the contract);
5. A brand is not always a guarantee of success, discuss with a partner what you will get in addition to the brand (technology, favorable conditions with contractors, equipment);
6. If you buy a code, make sure it's patented;
7. Carefully study the contract: especially sections with obligations and penalties;
8. Before paying, be sure to ask for a project launch plan and those responsible for each stage. You must have a clear understanding of how you will launch the project after paying the franchise;
9. If you are buying a foreign franchise, find out who will be localizing the project.

It is no secret that starting a business from scratch is costly and involves significant risks. According to statistics, about 50% of small businesses do not survive even two years on the market. The use of a well-known brand for start-up entrepreneurs significantly reduces risks and allows you to bypass most of the "pitfalls", which is why the direction of franchising is becoming increasingly popular. Franchising is the organization of business relations for opening and running a business. The subject of such an agreement is a franchise - the right to open a business under a well-known brand for a certain fee using technologies and production secrets.

In this article, I will talk about whether it is worth it for a newcomer to the business world to buy a franchise business. You can also watch my video on whether it is profitable to buy a franchise now:

Franchise- the most affordable and fairly fast method of developing your business for beginner businessmen, requiring minimal investment. Below we will talk about the benefits of buying a well-known branded business model:

1. Well-established business processes. Smart people are known to learn from the mistakes of others. Asking the question: “Is it worth buying a franchise?” you need to take into account the fact that by buying a ready-made business model, you will learn about the most common mistakes that the franchisor or other franchisees have made, and you can easily get around them.
2. Business plan. All financial indicators of the business are transferred to you: approximate investments, payback period, net profit, average check. Thanks to these indicators, you will be able to analyze the course of your business and find problem areas that the franchisor will help to fix if necessary.
3. Brand recognition. Buying a franchise for a beginner involves using a well-known brand that has already won the trust of customers. This factor reduces advertising costs to a minimum, since well-known brands practically do not need it, and recognition will also reduce the time to profit and recoup the funds spent at the launch stage.
4. Training and support. A decent franchisor, along with the right to use his trademark, transfers to you all the theoretical and practical subtleties and nuances of the business. Often the transfer of these skills takes place in the form of a training program or course, which allows you to absorb information as efficiently, easily and quickly as possible.
5. Support. The franchisor team provides support in all areas: you can ask your account managers any questions about your business, and if necessary, the head office will provide you with legal protection, assistance from IT specialists to correct technical problems or designers to produce advertising products.
6. Quick start. By using well-established business processes transferred to you, you will be able to reduce the start-up period to a minimum: from two weeks to one month! The launch mechanisms are already known, the management company team will always come to the rescue - what else is needed for a successful start?

If you need help in selecting a profitable franchise or auditing the chosen one, please contact me, I have extensive experience in franchising, I will be happy to help!

What problems can you face

It would seem that the answer to the question: “Is it worth buying a franchise?” obviously positive, however, it is impossible not to say about the negative aspects of this business model.

1. Restrictions and penalties. The activities of a franchisee entrepreneur are strictly regulated by the terms of the contract, so there is no “space for creativity” in this business. Moreover, when fixing the fact of violation of the terms of the company-owner of the brand, a strict system of fines is provided.
2. Lump sum. A one-time payment for joining the network and the right to work under a well-known brand. The financial factor for start-up businessmen is important, and some franchises are of great value.
3. Royalty payments. Regular payments for the right to use the brand. While this is an additional financial burden on the franchisee, the knowledge and technology transfer base can quickly recoup these costs.
4. Franchisor property. When buying a franchise, it should be understood that upon termination of the contract, the return of all commercial information transferred to you at the conclusion of the contract is provided, since this is the property of the franchisor. You will not be able to work in this business area, although you have already studied all the nuances and technical processes. The main advantages and possible problems that you need to familiarize yourself with before deciding whether a beginner should buy a franchise, I also recently highlighted in a video on my channel. I think you will be interested to read it.

Real reviews about the franchise business

Of course, in order to study the business model that interests you, you need to read the reviews of people who have already bought it, and if there is an opportunity to get to know two points of view better: current and former franchisees. Also, reviews can be found on the Internet, below I will give some of them.

Let's start with positive reviews. It's no secret that various options for organizing leisure activities for children of preschool and primary school age are now in great demand. Below is a testimonial from a franchisee who opened a franchised language school and was very satisfied:

“I will tell you my story of cooperation with a well-known brand of a language school, I will share my feedback about the franchise. From my own experience, I was convinced that it is much easier for children to learn foreign languages ​​from an early age. I began to look through the catalog of the most profitable franchises in Russia and saw a network of language schools. We decided to try!

Already in the first six months of work, it became clear that the methodology developed by the network's specialists gives excellent results. All teachers of my Center were approved through the head office. They know the language taught perfectly, they know how to work even with the smallest students. The training programs are designed in such a way that you can join the group at any time. The franchise paid for itself pretty quickly, I get support to run the business, new stuff comes out all the time. Once a week we meet at webinars, they are held by employees of the head office, and every year we gather for meetings - all franchisees and employees of the management company!”

Today, there are a lot of parents who want to embody their unfulfilled dreams of a big stage in their children. According to statistics, 70% of girls aged 5-7 have attended dance schools at least once. In the review below, the franchisee shares his impressions of opening a choreographic franchise school:

“I have dreamed of my own business for a very long time. But, as a girl, I wanted my business to be not only profitable, but also beautiful. For a long time I could not find my direction, such that I really liked everything, and would be able to do it. Accidentally found information about the franchise of the choreographic school. From the moment of signing the contract to the opening of the school, exactly a month has passed for me. In the materials provided to me, everything is available and written in detail. A pleasant bonus was the franchisee's chat, where we feel like one huge team and always find answers to emerging questions together. Taking into account the transferred theoretical and practical base, we were able to win a leading position among competitors, and this cannot but inspire! I didn’t regret my decision to open a choreographic franchise school for a minute!”

Catering franchises are very popular due to the high demand among buyers. Here, for example, the franchisee, who acquired the cafe franchise, talks about his successes:

“Why did I choose this particular franchise? I think it's a very reliable franchise - that's the first one. The second is a very rich assortment of various pastries. I have about seven years of experience in entrepreneurial activity, all this time my activity has been related to catering. I, as an experienced technologist, studied production technologies and was satisfied.

I am very pleased with the opening of this business and the interaction with the franchisor directly. Employees of the management company answer any questions, competently advise, and there is support day and night!

Clothing franchise business is sure to be in demand. However, there are also dishonest franchisors, one of them was encountered by the author of the following review:

“I became another unfortunate customer who bought a franchise of a well-known clothing brand. The design of the store seemed interesting to me, the sales manager told everything very beautifully - and of course I believed in it. At first there were no problems, they made a design, conducted training. But as soon as I transferred the money for the purchase of the collection, problems immediately began to my great chagrin! There was no delivery of goods, they always came up with various difficulties. The delivery was delayed for a huge period, I was wasting time and losing customers. In the end, I decided to purchase collections from other suppliers myself, as I did not know how much longer it would take. I didn't guess! However, the franchisor behaved extremely dishonestly, no one returned the money, there is no support in the process of work. According to the management company, it is needed only at the time of launch. Although I coped with my difficulties, I do not recommend this franchise to anyone!”

The following franchisee had a negative experience with acquiring a foodservice franchise:

Conclusion: so is it worth starting a business under a well-known brand?

I hope this article has helped you answer the question of whether it is worth buying a franchise for a beginner, as well as understand all the intricacies and nuances of this business. Of course, this decision requires the most detailed study of all information about the company that owns the brand, analysis of competitors, and obtaining feedback from existing and former franchisees. Think, study, analyze and don't be deceived!