Precautions To Be Taken For The Franchise Business Opportunity

People do look for business opportunities, just as they look for the job seeking opportunities

. There are a number of different media which can be used for the same. The most commonly used are, of course, the newspapers and the internet. These media are the most commonly used due to their wide reach and readability. The business opportunity can be of different types. These could be in the form of the tenders for the contracts to be awarded, the business for sale opportunity, the franchise business offers, the joint ventures and many others. Normally, it is not easy to make a choice from among these offers.

However, it is generally better to decide from your own standpoint and take a decision on the basis of your own requirements and foresight. A business for sale might give you the opportunity to the lord of your own destiny whereas the one of a franchise business might give you limited autonomy in your business decisions. A business opportunity has to be evaluated for its own strengths and weaknesses as also from those of the others. When the nature of the opportunity is in the form of your dependence on someone else or in the form of collaboration with someone, like in a franchise business then the proposal shall be looked into with a lot of care. Some of precautions that you might take in this regard are:

1. Expected returns estimates: If your expected returns are more than the franchisors then you can safely take the risk. The problem arises when your estimates are significantly less than those of the franchisor.

2. Profit sharing: Being the owner of a brand puts the franchisor in a lot of advantage. He might try to impose a less than equitable profit sharing formula for you. That you do get a reasonable share of the profits of the sale proceeds shall be made sure. Otherwise, there is no need to go ahead with the proposal.

3. Take the proposal where you are experienced: If the proposal is from a work area where you are experienced, then there is nothing better than that. Sometimes you might feel like taking the franchise of a business which is new and holds the potential for the future, which you might like to exploit by being the early bird to take your pie of the market share. In this case, the franchise business shall be a very well calculated risk.

4. Legal jurisdiction: Normally, the jurisdiction of the courts of the area in which the franchisee is located will hold but it can also be the one which is mentioned in the agreement of the franchisee and franchisor. There shall be sufficient provisions in the agreement on how the matters related to different disputes will be addressed by the parties to the contract. These provisions become vitally important in case some problem arises.

5. Geographical exclusivity provision: The very concept of a franchise would fail if the same is awarded to another person in the area since market share and hence the profitability would be divided. The franchise business offer shall, therefore, have sufficient geographical area and reach so as to be significantly profitable.

by: Help Me Live The Dream

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