$$$ . . . Money Money Money !!! Picture shows the staircase connected from bottom to the summit of "$". Where is your position now? Which staircase is yours? What step are you standing now?
There are infinite ways to earn $$$ . .Let me show you a way to put in more money in your "tabung"...but... keep in mind that this way is strongly dependent on how much capital in your hand...>.<. . .
Franchise! The safest business in our society! Why so? Because it is a well developed system where every single ingredient and business model are prepared by a master franchisor. What we need to do is to confirm which franchise is interested and have "3Cs" in hand, meaning: Confidence, Customer & Capital". Of course, every business needs this, but franchising will make you more clear on the amount of customer can be tackled, how much capital you need to prepare and you will have a certain level of confidence in heart based on the current market statistic on the franchise that you have chose. Let me show you what are the tools that you should be equipped in franchising.
A new franchise business - is opened every 8 minutes of every business day. Some statistical results of franchise obtained by the International Franchise Association (IFA) are shown below:
· * There is one out of 12 businesses is franchised business.
· * Almost 4% of all small businesses in the U.S. are franchises.
· * Franchise business is contributed over 1.5 trillion in the economic output in year 2004.
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| "Mai Dang Lau" (Chinese) |
· The top franchise industry is the fast food industry. Up to date, McDonald’s fast food restaurant is famously known as the top franchise company in the world.
Before we invest on franchise, there are some important points to be considered like:
ü * Is the brand in the franchise is well known in the country?
ü * If not, does the franchise having a unique selling point that will generate “traffic” to its outlet?
The brand is the trademark of the franchise and the unique selling points could be various elements within the business that are uncommon in the industry. If the brand is well known in the country, the franchisee need not exert too much effort in generating sales and introducing the brand to the market and people. People will be more readily trust and accept the brand as they will be assured the quality of products and services provided by the brand. The time and money can be invested by the franchisee in other elements in the business such as construction cost, cost of the goods, staff salary and etc.
On the other hand, if the brand is not known, the effort, time and money invested on the franchise are a risky affair. The franchisee does not known how the market will respond to the franchise and this in turn causes them to invest more in advertising to promote the product or services to the market. Besides that, a franchisee with the unique selling point will reduce the risk involved in introducing a non well known brand into the market.
Financial consideration:
The fees that may arise when purchasing a franchise:
1. Upfront franchise fee:
The initial franchise fee such as – Is the principal/franchisor an established franchisor? What is the track record of the franchises held by the other franchisees? Is the brand of the franchise well known? Master franchise fees will definitely costlier than individual franchises. Master franchise has given the exclusive rights to one party to expand the franchise business in a specific region.2. Periodic payment:
In exchange for the use of the principal’s brand, a royalty fee will be paid (lump sum or based on sales or both).
3. Cost of premises:
Generally, franchisees will receive guidance on how to choose a location that is suitable for the type of business carried out and the franchisor will help with providing advice on the construction of the premises for the franchise. But, the cost to rent, construct or renovate the premises will be borne by the franchisee.
4. Other costs:
Like cost to equip an outlet, to purchase initial inventory, operating license, insurance, furniture and anything else required to make the outlet operational will be additional cost to the franchisee.
5. Advertising & promotion:
Most franchisors require a percentage (normally 2%) of the turnover from each outlet to be paid to the franchisor as advertising and promotion fees.
6. Training:
Payment may be required for the regular training of managers and staff in the franchisee’s business and for materials used for the training. Cost may include fee to transport the principal to the country from wherever they reside, accommodation and meals.
Again...the picture tells you the factors to be considered in franchising. . .
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