What To Look Out For When Searching For Low Cost Franchises

1. Hidden Costs: Make sure that there are going to be no hidden costs. A lot of the time the cost you see associated with a franchise only covers the right to use the name and processes of that particular franchise. Leasing a location, buying the equipment and getting the stock or materials needed are usually all extra. You will want to find out if some or all of these extra costs are included (sometimes they are). You also want to know about any other necessities you may need to purchase to start your business.

2. Support: What kind of support is offered to you? Sometimes franchises are sold cheap because they are very inefficient in certain areas, such as training and support. When looking at franchise opportunities with little cash, you will want to know what is available to you before you start. This way you can asses in what areas you will be on your own.

3. The Target Market: Never forget to analyze the market around you. Will there be any demand for what you offer? Will you be able to compete with the other businesses in the area? Can you meet their prices? These are all important things to consider. Franchise opportunities with little cash can be hard to market against the same types of businesses that have higher start up costs. This is because the higher investment usually means that the franchisee has better processes, support and training to work with. You will need to have a marketing tool to use as arsenal, such as lower prices.

One Last Piece of Advice When Considering A Franchise

If you are considering franchise opportunities with little cash, you should examine your options very carefully to make sure that you are still getting a proven business model and good value for your money. And don’t forget about the Internet. There are many online businesses that you can start for a fraction of the cost that even a cheap franchise would run you. If you do your research, you could start a legitimate, profitable online home business before you could finish the paperwork involved in purchasing a franchise.

To see what a Legitimate, Profitable Home Based Online Business can offer you and to team up with one of the Largest Online Marketing and Mentoring Programs on the Internet go to http://www.ImagineYourselfFree.com Fill out the form on the first page and then watch the video in step #3 on the second page.

Katrina Cole is an Internet Marketer and member of one of the Largest Internet Marketing & Mentoring programs. She is dedicated to coaching those who want to experience a Legitimate Internet Opportunity that will teach Top Online Marketing Techniques. For more information on how to create a successful Online Home Business or transform your existing one into a more profitable opportunity, please visit http://www.KatrinaCole.com

Author: Katrina Cole
Article Source: EzineArticles.com
Pressure cooker

You pay a fee to purchase the franchise, then an ongoing monthly fee which is meant to cover advertising and other support services from the franchisor. Sometimes this includes finding new customers for you, and sometimes you must do that yourself.

As with any business purchase, be very aware that not every franchise will be successful, and that you have no guarantees whatsoever that you will make a profit. It is also possible that you will make a significant loss from the start, and may never move into profit.

How Cleaning Franchises Work

Typically you would pay the franchisor for a client base worth a certain amount of annual fees. For instance you may be given 10 clients, with an expected annual spend of $20,000. The price you would pay for that would generally be about 50%, or $10,000. In most cases you would pay ongoing monthly management fees for support from your franchisor. Often these fees are around 10% of your monthly revenue.

Some franchisors even offer you credit to finance your purchase. As you might imagine this can seem very attractive to someone who is struggling financially but very much wants to start their own business. However if things go wrong this can land you in even more debt.

Your income can also disappear very suddenly because if you decide that a customer is too damaging to your business and you need to dump them, or if a customer lives too far away for you to be able to service the account, or if you lose a customer because they decide they don’t want your services any more.

Other Potential Problems with Cleaning Franchises

Cleaning franchises often appeal to people who have limited education, or whose English language skills aren’t adequate. In both cases these people may struggle with the convoluted and complex language of the franchise agreement and it is very easy to get into a contract which disadvantages them. Always get professional advice from an objective, qualified 3rd party such as an accountant and/or a solicitor.

Verbal agreements are worthless. The franchisor or his/her representative may be overly-optimistic in their descriptions of what’s being provided. Never pay attention to verbal agreements, only to the information contained within the contract.

Although you may have purchased a group of accounts, it may be that the franchisor doesn’t immediately make those available to you, and your cash flow can be severely compromised if you’ve based your business plan on having work from the start. You may need a backup plan including a second job in order to survive the first year.

Monthly management fees can prove to be an impossible burden because they usually consists of a fixed amount which you must pay whether you are earning money or not, as well as a percentage of your revenue. Also you will pay those fees even on customers that you’ve found by yourself, without any help from your franchisor.

Any accounts you have sourced yourself, from your own efforts and expense, may still belong to the franchisor. This means that if your agreement ends, you lose everything.

Most franchisors offer training but this may be poor quality or leave out the strategies and support that are essential for guaranteed success. Make sure that you’re assigned a skilled mentor who has a solid track record of success.

Where the franchisor is finding new accounts for you, it is the franchisor who sets the hourly rate that you may charge. In some cases this rate may be insufficient to cover costs of staff and equipment, meaning that you’re operating these accounts at a loss.

Very few customers of cleaning services retain their cleaner for more than a year. This means that you have very little reliability or continuity and must always be seeking new accounts. Some franchisors take advantage of this by charging you for new accounts that they provide, even though they are merely replacing what you already bought in the first place.

You can lose your franchise and your franchise fee, and be left with nothing but debt if you don’t meet your service or performance targets. Some customers are slow payers or end up not paying at all. If your franchisor sues for payment, you might still have to pay the legal costs, even though you get nothing from that.

These days it’s common for a franchisor to demand your personal guarantee of any debts or liabilities that arise. This means that your personal assets, such as your home, car, furniture and electrical equipment are immediately put at risk because they are totally exposed to potential debt.

Your contract may state that no-one in your family can join or own another cleaning business, not just while you own the franchise, but even afterwards! Some of these cases have failed in court, but do be aware of the risk.

How to Stay Safe

No matter how cheap the franchise, there is still risk. You can minimize that risk by:

Giving the disclosure document and contract to both your accountant and your solicitor. Pay attention to issues such as legal cases and failure rates, and have them explain both documents, including your rights and obligations, comprehensively.

Talking to existing and ex-franchisees. Typically the franchisor will only refer you to businesses that are successful. You need to speak with the failures also to determine whether the franchisor has faults that should be warning signs for you.

Contacting the appropriate government department (wherever you are in the world there will be a government department that administers franchise agreements) and discover what information they have for you.

Getting any verbal statement or agreement in writing. Verbal statements or agreements are totally worthless and it is madness to do any deal on a handshake. No matter how seemingly minor, get it in writing! If they won’t do that, don’t just walk away – run! Honest people are not afraid to put their claims in writing.

Precisely understanding your obligations so you can plan cash flow around fees and expenses.

Getting the truth about earnings claims and ensuring that you’ve spoken to other franchisees who have made that money from the start.

Being incredibly cautious if you’re considering getting credit to finance the deal, or to carry you through the early days before the cash starts to flow. Think carefully before exposing yourself or your family to disastrous loss.

A Safe, Easy Alternative to a Cleaning Franchise

What would you think of a business which:

You could purchase for less than $2000
Would give you 90% of that back if you decided to stop within 12 months
Had maximum monthly operating costs of less than $500
Had no membership fees, management fees, royalties or other costs
No complex contract
You were under no liability to perform and no danger of being dumped
Training and mentoring for success (with highly-qualified mentors) was completely free
Audited and published earnings were excellent
You could simply walk away from any time you wished, without liability or cost
You could develop an income stream that could continue long after retirement, and even be willed to your children to create generational wealth?

It’s well worth a look at other, better options before exposing yourself to the expense, risk and uncertainty of a franchise

You can see a fabulous alternative to a franchise here and avoid franchise fees altogether!

Author: Christine Sutherland
Article Source: EzineArticles.com
How Electric Pressure Cookers Work

And the first key decision you have to make is choosing the right commercial cleaning franchise.

Some franchises promise high return on investment, while others promise full advertising support. While these factors are definitely very important they are not so powerful in isolation. You have to look for a franchise that offers you ‘the full package’ before you can make your decision.

Here are the key success factors you need to pay attention to that will help you make a success of any commercial cleaning franchise.

1. The Overall Reputation of the Cleaning Business.

This makes a lot of common sense. If the franchise has a good reputation with its existing customers, you will have a much easier time getting clients of your own in your area.

You can use client testimonials and referrals to help you get started, then form your own loyal client base to keep bringing in new clients.

2. Business Development Support.

It’s important that the franchise owner gives you 100% support to ensure that your business will have long-term success. Business development support includes: training and seminars, giving advice on which locations are best for you to set up your business in, and comprehensive market research statistics.

3. Marketing Support – Expertise and Materials.

Successful franchise owners provide adequate advertising support to franchisees. You should look to be getting pre-defined marketing materials for all necessary mediums – online and offline. These marketing materials should have been tried and tested ready for you to just customise and use straight away.

This minimizes your risk of spending a lot of money on working out what marketing works in your area and what doesn’t.

4. Detailed and Tested Business Processes.

This is critical! If you are looking to buy a commercial cleanining franchise, you must make sure you are getting good usable processes with the business package. These are the things that will enable you to “hit the ground running”.

Processes create a fail-safe environment, and allow you to get on with the more important things in your new business – like getting clients – as opposed to having to worry about teaching your employees the correct way to clean a kitchen…

5. Business Goals Alignment.

You and the franchise owner should work towards achieving a common business goal. Remember, it’s ultimately a joint venture – both of you have high stakes on it.

Look for a franchise owner who immediately conveys his long-term plans with you. This means that the franchise owner is not looking for a ‘quick buck’, but is rather confident about the long-term success of the business.

6. Customer Support.

Although customer support is often overlooked, it is one of the critical elements in choosing the best commercial cleaning franchise.

Does the customer support immediately respond to your queries? Does the customer support attend to your needs? Since customer support is essential to this type of business, the franchiser should set an example.

Having your own commercial cleaning franchise requires hard work, motivation and determination. In return though, you’ll get financial freedom and the opportunity to create your own future, as opposed to working for someone and relying on their ‘good grace’.

If you spend good time preparing and researching the different aspects of owning a business, you should increase your chances of success.

Jeremy Gray is a successful entrepreneur and a commercial cleaning business owner. He also owns and maintains CleaningBusinessSecrets.com, an indispensable resource for anyone looking for information about a commercial cleaning franchise.

Article Source:http://www.articlesbase.com/franchise-articles/key-success-factors-for-starting-your-own-commercial-cleaning-franchise-1305381.html