Franchising – The Dream!
Franchising is a concept that allows the sharing of brand identification, a proven marketing and distribution system and an overall successful method of doing business. The real goal is to take over market share and gain more customers or revenue than your competitor!
Of course, there are many franchisors that are common and known throughout the world – McDonald’s, Wendy’s, Dunkin Donuts, etc. Franchisors have provided entrepreneurs with turnkey operations to get involved with successful stable business operations for years. However, recently there have been some attacks on the franchise industry.
The National Labor Relations Board cited McDonalds Corporation (the Franchisor) as a joint employer of workers employed at its franchisee-owned restaurants. Various jurisdictions throughout the nation are increasing the minimum wage significantly in fast food restaurants. Implementation of the Affordable Care Act has caused more confusion and costs than anticipated. And overall, when you look at it, some of the small businesses out there with less than 50 employees are being forced to keep up with regulations that were meant for large corporations! It is a jungle out there!
Many believe that part of the franchise systems fault is that not everybody understands franchising. There have been reports through focus group testing that many people think that franchisee’s employees are paid by the franchisor. And to make it worse, some franchisee employees believe the same thought! It just is not so! The franchisor and the franchisee are different and distinct legal business entities.
Franchising has been around for many years and will continue for many more. It provides business owners with an opportunity to pursue the American Dream. Owners of franchises come from all backgrounds including sports, executives, educators, and veterans. Virtually any business person can get involved with a franchise! Although lawsuits and regulations may not be in the franchise industry favor currently – it will change! The economy needs this very important industry – it is stable- it is a reliable entry point into markets – it is competitive and it is franchising.
If you have any additional questions around franchising, please fill out the form below and a member of our Consumer Products team will reach out to you.
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