Franchising is not for everyone

Start an Import Business, or Buy into a Franchise?

Here are the top three things to consider think about, when deciding between a franchise, or starting an import business

1. Start-up capital – do you wish to invest in product and marketing, or spend a large sum buying into the franchise brand and training

2. Ownership and control – do you wish to be in complete control or products, marketing and strategy, or answerable to the franchisor

3. Return on Investment – based on investments in both business models, how soon will you see returns based on the higher cost of a franchise, compared to the lower and more controlled costs of your own import business

The Decline of Unsustainable Franchises

News article – Aussies Clueless About Running a Franchise

News.com.au posted a very interesting story in December 2011 about Australian’s love affair with franchising as a form of business start-up, which appears to be on the decrease in the wake of the GFC. The report rightly points out that quite often many people don’t have a good understanding of what they are buying and perhaps expect the concept to soar from day one, whereas a franchise like any other business requires a lot of hard work and perseverance.

The Real Cost of Franchising

Many people mistakenly believe a franchise, although higher cost, is a lower risk option – but it is not. When the franchisor is asking for 7% of turnover per month for licence fees and up to 3% of turnover per month for a marketing fund,  the franchisee has a lot of work to do before they break even. Not to mention the cost of of borrowing to buy the franchise and ongoing fixed cost base.

If you are considering a franchise involved in importing, check out My Import Label as an alternative. Our import export course mirrors that offered by franchises but it is pay as you go – and we don’t charge ongoing licence and marketing fees.

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