What does the Ju Chenggong franchise do? What's the content?

Some franchise relationships are mostly generated from existing business entities. When owners in a certain industry independently develop to two or three stores, they usually consider using other people's funds to expand the business, and through the development of a franchise system, they agree to allow an independent owner to use their specific trademarks, products, services or comparison systems. When, a franchise relationship will be created. The franchise franchisor charges franchise fees, regular royalties and other agreed fees.

2. How much potential does the franchise market have?

Franchise chains are the current means of growth in the business world. In 1991, there were 540,000 franchised stores in the United States, with a turnover of 757.8 billion yuan, accounting for nearly one-third of the total retail sales in the United States, and as many as 8 million employees. It was once cited by "Big Trends" Author John Naseby predicts: By the year 2000, the turnover of the franchise market in the United States will reach 50%, which shows that the development prospects of the franchise business are promising.

3. How to become a franchisee?

The first step to join is to confirm the relevant status of each franchise system. It is necessary to evaluate and analyze the quality of each franchise system, select the one whose conditions best meet personal needs, and then directly contact the company to collect relevant franchise introductions, instructions and other information to determine whether it is suitable to join.

IV. What you should know before joining

Before joining any system, franchisees should contact the franchise authorizer and existing franchisees. When contacting the franchise franchisor, the following information should be provided upon request:

(1) Competition situation among peers

(2) Detailed list of various fees payable for franchising (franchise fees, royalties) , advertising fees... etc.)

(3) Qualifications of franchisees (age, education, financial resources, location... etc.)

(4) Initial investment cost ( Decoration, equipment, purchase... etc.)

(5) Conditions and rights for closure or transfer

(6) Contents of the contract (term, franchise fee, royalty... . etc.)

As for visiting existing franchisees, you can ask them to provide the following information:

(1) Profit status

(2) Franchise The cooperative relationship between the franchisor and the franchisee.

(3) Investment status

(4) Frequently asked questions after joining (delivery, advertising, coaching...etc.)

In addition, you should also Take the time to consult a lawyer about the legal aspects involved in the contract in case you need it in the future.

5. How much fees do new franchisees usually have to pay?

The investment cost of joining is usually not low. In the United States, the initial franchise fee ranges from US$5,000 to US$35,000 depending on the industry. The monthly franchise fee is approximately 3-7% of the monthly turnover, plus advertising fees of approximately 3% of the monthly turnover. In addition, franchisees Sometimes you have to pay 3-8% of the monthly turnover depending on the actual situation as rental fees for equipment, land and buildings. The total start-up cost of franchising is approximately between US$8,000 and US$400,000.

6. Will the new franchise be successful?

Franchising cannot guarantee 100% success. However, according to a report by the U.S. Department of Commerce's Small and Medium Business Administration, from 1971 to 1987, less than 5% of franchise stores closed down, but 65% of small independent stores closed within five years. Therefore, as long as the new franchisees have strong ambition, good health, moral character, sufficient funds, and the management skills of the franchise system, there should be great potential for running a successful franchise store.

2. How to evaluate the chain franchise system

If you want to enter the chain franchise industry, you must not be fooled by its appearance. You must carefully evaluate the chain franchise system to avoid making mistakes and causing repeated complaints. Past examples show that some franchise systems with a good image may change their color overnight and fall from the peak to the bottom due to various reasons such as financial crisis, credit expansion, failure of reinvestment, etc., and the impact will be on the wrong people. The franchise owner couldn’t help but ask the heavens speechlessly.

Before you want to join the franchise, you must clearly know what your starting point is? Is it a well-known trademark focusing on chain franchise headquarters? Or does it take less time to develop a franchise store? plan or its rapid and effective accumulated management experience? The expectations of these franchisees beforehand may not be consistent with the benefits provided by the headquarters. Therefore, if the franchisees' greatest needs can be considered, future complaints can be reduced.

After statistics, the benefits of participating in franchise operations can be summarized as follows:

1. The franchise system can provide well-known brands that attract customers.

2. It takes less time to develop franchise stores.

3. The franchise system provides proven business operation formulas.

4. The accumulation of management experience is relatively fast and effective.

5. Receive training to increase the likelihood of success in running your own business in the future.

6. There is greater job satisfaction than being employed and receiving a salary.

7. There is less risk than operating independently.

8. Enjoy lower purchasing costs 9. Have more independence than being salaried.

10. Through the franchise system, it is easier to expand your business.

11. The trend of the times can prevent you from being eliminated.

12. It requires less effort and is easier than running an independent business.

13. The cost of opening a franchise store is lower than that of an independent store.

14. Participating in a franchise is more profitable than operating independently.

There are different opinions on how to evaluate franchise chains, and there is no consensus. Among them, the four evaluation items proposed by the American Franchise Association (IFA) are the most valuable as a reference. That is, first, financial performance, second, company growth and management quality, third, company stability, and fourth, the quality of getting along with the franchise headquarters and franchise stores, which can be divided into the attitude and service of the franchise headquarters, and the evaluation of the relationship between the franchise headquarters and the franchise.

Among the recent franchising systems of three thousand different industries in the United States, the top 25 with the best operations are evaluated based on the four items mentioned above, among which the most important one is the relationship between the franchise headquarters and the franchise stores. relationship. The so-called good start is half the success. If we can understand the problems of the current franchise system and not hold too high expectations, we can relatively reduce the rate of disappointment. The problems of the current franchise system can be relatively reduced. As follows:

1. Maintaining standard and consistent procedures and controls within the franchise system has its difficulties.

2. The profit situation is not as good as expected,

3. Franchisees are overly dependent on franchise owners.

4. The franchise system lacks suitable franchisees

5. Lack of stores with suitable location conditions

6. Franchisees are forced to purchase goods from specific suppliers

7. The government has not yet formulated legislation, causing confusion in business operations.

As for a company's growth, management quality and financial performance, how long it can survive can be judged by its operating conditions. Only a growing company can maintain product innovation and competitiveness, and the company's stability can be judged by Newspapers and magazines or manufacturers have discovered the situation. A chain system with an unstable number of stores, high staff turnover, financial red lights, and insufficient franchisee confidence index will inevitably have a loose foundation. As long as the franchisee pays more attention and inquires carefully beforehand, it will be It can avoid the fear of future cooperation.

Here we provide further chain franchise system evaluation projects as a reference for franchise owners to diagnose the chain system’s operating constitution.

1. Comprehensive assessment: (1) Products or services, (2) Chain scope, (3) Existing store conditions, (4) Reasons for closure of franchise stores, (5) Development trends of new products and services, (6) Competition situation, (7) Franchise store distribution pattern, (8) Franchise conditions.

2. Franchise headquarters: (1) Name and location, (2) Is it a listed company? (3) If it is not a listed company, what is the credit status of the person in charge?

3. Finance and law: (1) Expert consultation----law, finance, operation and management, (2) Franchise cost analysis---starting capital, payment to the head office, and which fees can be refunded ? (3) Financial support---Does the headquarters provide funds to franchisees? What's the interest rate?

4. Education and training: (1) Initial training---period? cost? Training courses, (2) follow-up training --- training courses? cost?

5. Marketing: (1) How to sell products or services? (2) How to obtain sales guide? (3) Who are the target customers? (4) What is the advertising budget of this department? --Budget, media, (5) What kind of advertising promotions are provided to franchise stores?

6. Assistance from the headquarters: (1) Who are the operators and managers? (2) What service departments are there? (3) Is there a dedicated person to assist with business guidance?

In addition, American industry players also proposed a set of verification items for cooperation.

1. How much royalties do franchisees need to pay?

2. Can franchisees obtain seed conservation technology?

3. How much investment does a franchisee need to pay?

4. Can franchisees accept the management rules of the franchise headquarters?

5. The extent to which franchisees can control operations (such as raw material procurement, sales quotas, etc. 0

6. What is the market value of the products provided by the franchise headquarters?

7. What is the public’s perception of this franchise?

8. Does the franchise headquarters provide advertising? 9. What does the franchise headquarters do to franchisees? What services can be provided? (For example: business district investigation, training, maintenance, etc.)

10. The franchise headquarters’ policies and conditions for ending the cooperative relationship with franchise stores

11. , The frequency with which the franchise headquarters terminates the contract or does not renew the contract with the franchise store

12. The past legal records of the franchise system

13. The timeliness of the franchise cooperation. .

Evaluation of the probability of franchise cooperation failure

15. Are there any differences between the policies of franchise headquarters and franchise stores?

16. Franchise headquarters’ policies for franchise stores selling goods

17. Franchise headquarters’ policies for maintaining the franchise store’s business district

18. The first step after joining. Profitability in the first and fifth years.

After introducing several chain system evaluation projects, the most important thing is for the franchise owner to know more about it beforehand, make more comparisons, and make more preparations in advance. Avoid becoming a franchise failure