FRANCHISE
What Are The Advantages And Disadvantages Of Owning A Franchise? A damaged, system-wide image can
ADVANTAGES “Owning a franchise allows you to
go into business for yourself, but not by yourself.” A franchise provides franchisees
with a certain level of independence where they can operate their business. A franchise provides an established
product or service which may already enjoy widespread brand-name recog- nition. This gives the franchisee the benefits of a pre-sold customer base which would ordinarily takes years to establish. A franchise increases your chances
of business success because you are associating with proven products and methods.
Franchises may offer consumers the attraction of a certain level of quality and consistency because it is mandat- ed by the franchise agreement. Franchises offer important pre-open- ing support: ƒ site selection ƒ design and construction ƒ financing ƒ training
ƒ grand-opening program
Franchises offer ongoing support: ƒ training
ƒ national and regional advertising ƒ operating procedures and operation- al assistance ƒ ongoing supervision and manage- ment support ƒ increased spending power and ac- cess to bulk purchasing
DISADVANTAGES
The franchisee is not completely in- dependent. Franchisees are required to operate their businesses according to the procedures and restrictions set forth by the franchisor in the franchi- see agreement. These restrictions usually include
the products or services which can be offered, pricing and geographic terri-
42 HISPANIC NETWORK MAGAZINE
tory. For some people, this is the most serious disadvantage to becoming a franchisee. In addition to the initial franchise
fee, franchisees must pay ongoing roy- alties and advertising fees. Franchisees must be careful to bal-
ance restrictions and support provided by the franchisor with their own ability to manage their business.
result if other franchisees are perform- ing poorly or the franchisor runs into an unforeseen problem. The term (duration) of a franchise
agreement is usually limited and the franchisee may have little or no say about the terms of a termination.
Source: International Franchise Association
New FDA Menu Labeling Regulations Need Clear Guidance for Franchise Restaurants
T
he International Franchise Association, in anticipation of the recent release of a notice of proposed rulemaking by the Food and Drug Administration
regarding the posting of menu-labeling information, called on regulators to continue to heed the guidance of franchised restaurants and small businesses who are eager to comply with the new rules to provide consumers with help- ful information. The restaurant industry, as the largest business format category in fran-
chising, encompassing more than 246,000 establishments, 4.4 million jobs and $287 billion in economic output according to IFA’s 2011 economic outlook for franchised businesses, has consistently supported providing consumers with clear and consistent nutrition information. “IFA appreciates the FDA’s willingness to work directly with the franchised
restaurant industry and we hope the final rules will result in a workable and affordable regulation for small restaurant owners, particularly in a still chal- lenging economic environment,” said IFA President and CEO Stephen J. Cal- deira. In 2009, IFA in conjunction with leaders in the franchised restaurant indus-
try, developed the Coalition for Responsible Nutrition Information (CRNI), to provide policymakers and regulators with guidance that eases the burden on small businesses to comply with the new law, while at the same time pro- viding consumers with helpful and efficient information. IFA and CRNI met several times with the FDA and the White House and in December submitted comments urging the FDA to complete a full rulemaking process for all provi- sions in the new menu-labeling regulations. “The agency’s decision to postpone guidance and conduct a full rulemak-
ing process will allow franchised restaurants to provide input that we hope will result in the government getting the new menu-labeling regulations right the first time, and help minimize cost and confusion for small, franchised restaurants,” continued Caldeira. “We applaud the FDA for moving forward in the most efficient, cost-effective manner possible and urge FDA to continue to give franchise restaurant owners adequate time to comply with the new law.”
“The IFA will be reviewing today’s published notice with our restaurant
members over the next several days and we look forward to providing com- ments to the official record,” Caldeira concluded. Source: International Franchise Association
Celebrating 19 Years of Diversity
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