Chain operations are often seen as a shortcut to success. Statistics show that 5% (about 25,000) franchise stores close every year in the United States. In China, due to the imperfect management system and inflexible capital turnover, there are many cases of eventual collapse. Therefore, how to minimize the risk of catering franchise?
Before entering the franchise system, it is necessary to carefully consider the following five issues:
First of all, how to start the franchise liaison? Most of the franchise liaison occurs from existing corporate entities. When a professional entrepreneur develops multiple stores independently, he or she usually considers using other people's funds to expand the company. When other entrepreneurs agree to join the franchise operation system and use their specific trademarks, products, services or this system, the franchise liaison will occur, and the franchisor will charge fees such as franchise fee and franchise power fee.
Secondly, what is the potential of franchise stores? Franchise operation is one of the important means for the growth of commercial enterprises. In 1991, the total number of franchised stores in the United States reached 540,000, and the turnover reached 757.8 billion yuan, accounting for nearly one third of the total retail sales in the United States, with 8 million employees. John Nesby, a former author of Trends, speculated that "by the 21st century, the turnover of franchise operators in the United States will reach 50%", which shows that the development prospects of franchise stores are very considerable.
Third, how to become a franchisor? The first step is to confirm the relevant situation of each franchise system. It is necessary to evaluate and analyze the strengths and weaknesses of each franchisor, select those who are satisfied with their personal conditions, and then directly contact the company to negotiate, collect information about the franchise, and determine whether it is appropriate to join.
Fourthly, what should we know before joining? Before joining, the franchisors should fully understand the headquarters. When contacting the licensor, the following information should be provided: competition among peers, detailed list of fees payable by the franchisor, qualification requirements for the franchisor, initial cost of investment, conditions and powers for suspension or transfer, and content of the draft contract.
When you inspect the existing franchise stores, you can ask them to provide the following information: profitability, the degree of support given by the headquarters, the investment situation, some common problems after joining. In addition, you should take the time to consult a lawyer about the legal aspects of the contract in case of need.
If you want to join the catering industry, you must not be confused by its superficial phenomena. You need to carefully evaluate the catering franchise system. From the past examples, some outstanding franchise system or because of financial crisis, credit expansion, transfer failure and other reasons, fell from the peak to the trough, the impact of which is the stunned franchisers.
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