Sunday, April 23, 2006

Franchises

Franchises are a short-cut to small business success. The franchise buyer spends money upfront to buy into a successful business and reduce the risk of failure. The heart of this business model is the franchise system, which spells out every little detail of how to successfully run the business.

A good franchise is based on concepts proven in one or more prototypes. There the system has been tried and refined to a high level. It's the proving ground that demonstrates the value of that particular franchise business. It's a model of a business that works. That's what you're paying for if you buy a franchise.

What a typical franchise won't do is give you the freedom to run the business your way. All the decisions are made for you. These are turn-key business operations that must be run according to all the details spelled out in the franchise manual.

The Great Harvest Bread Company is a "freedom franchise" that allows franchise owners to create their stores as they please. But they aren't on their own. They have the support of the company and all the other franchises. It's an interesting business model that you might want to explore.

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