Franchising without investments: is it real?

To qualitatively and quickly organize your own business, you usually need not only certain skills and knowledge, but also significant financial resources. Now starting entrepreneurs have two ways to organize their own Business. The first of them provides for the independent creation of a business and its promotion. The second is to cooperate with a company that has been on the market for a long time and has already earned its credibility. In the economy, this phenomenon is known as franchising. Without investments in this case will not work, but significantly reduce costs still can. Using a franchise, the cost of which is very different, often allows novice businessmen to bypass a number of problems that are inherent in the new business. Franchising without investments has its advantages and disadvantages.

Among the advantages, in the first place, it should be noted the possibility of significant savings in money to start a business. The company that sells the franchise is also interested in positive results, because we are talking about its credibility. Representatives franchisor necessarily consult a newcomer on the correct and effective use of materials and equipment, working with suppliers, sales system and other issues. Due to the fact that the development of the company is due to the attraction of foreign resources, changes in profits in its balance sheet are very fast compared to other methods of doing business. Plus, everything, you can earn without investments, and at the expense of using a developed trade mark. This includes its marketing schemes and advertising. At the same time, the consumer of services and goods often has no idea who is their supplier.

There are some drawbacks here. If you understand well, then we can conclude that in principle franchising without investment is impossible. How not to twist, but for the franchise itself will have to pay. In addition , an entrepreneur who has decided to follow a partnership way of doing business becomes a hostage to the franchisor in terms of a limited choice of his own development strategy. As practice shows, the franchise purchase agreement is signed for a very long time, therefore it is very difficult to stop cooperation. If an entrepreneur gets bored of doing business that way, and he decides to stop fulfilling his obligations, he will be sanctioned.

Despite everything, franchising without investments now enjoys great popularity in many world states. As the statistical data of American researchers testify, in the USA during the first year of activity, on average, three out of four established enterprises fall apart. At the same time, more than 85 percent of companies operating under the franchising system, necessarily survive and feel very well. Theoretically, for a franchise, you can not pay anything at all and take it for free. However, as practice shows, such an asset can hardly be called valuable, since such companies are practically not viable. An enterprise that can not sell its business can hardly sell products. A vivid example of such an idea of a business without investments is network marketing, which hardly brings the desired revenues.