Look Out, Overhead: The Advantages of Buying an Online Franchise
When most people think of a franchise business, they automatically think of giant global franchises such as Subway or McDonald’s. These are “brick and mortar” franchises, meaning that the franchisee buys an actual shop or restaurant. But there are also online and home-based franchises such as Blue Coast Savings Consultants (a cost-savings consulting franchise run entirely online) and Cruise Planners / American Express Travel (a home-based cruise / vacation planning business). Internet-based franchises have distinct challenges, but also a range of advantages, which explains why many start-ups and entrepreneurs are becoming online franchisees and buying into the business.
Cost Advantages of an Online Franchise
One of the biggest advantages of an online franchise business is low overhead costs. The expenses of a traditional franchise business include buying commercial space, such as a retail shop or restaurant, and décor, paying building maintenance costs, and managing staff payroll. An online franchise is much cheaper to buy and run – all you really buy is a domain name and website. This means you can spend the rest of your budget on other key areas like marketing, advertising, and web development.
Online Franchises - Open for Business 24/7
Another advantage of an online franchise is that the ‘online shop’ is effectively open all day; revenue can be generated 24 hours a day, seven days a week.Also, an internet-based business is accessible by anyone, anywhere, reaching customers around the globe. Unlike conventional franchises, online businesses aren’t restricted by physical location or traditional hours of operation.
Online Franchises Move Quickly
From the franchisor (home headquarters) perspective, a hugely significant benefit of running an online franchise system is the ability to easily implement changes across the franchise.Instead of re-branding or changing protocol across dozens or even hundreds of physical locations, online franchises can make overhauling changes or tiny tweaks throughout the whole business with minimum effort. For the individual franchisee, this means that the benefits from a great new product idea, clever marketing campaign, or other helpful innovation can spread across the entire franchise system in almost no time.
Running an online franchise offers a business-owner a highly-supported network of franchisees with significantly reduced costs. The low initial investment and other advantages attract new franchisees daily, making online franchises a trend that will continue to grow in popularity.
Understanding the Franchise Agreement
Due to the technical nature of the document it is best to have it legally reviewed by professional franchise lawyers to identify any hidden clauses or traps created by the franchisor to help them get the better position. It would be fool hardy to expect the franchisor to create a neutral agreement for the franchisee without their legal pressurizing.
6 Questions For Potential Franchisees Considering Home-Based Businesses
The best thing about working in an office is the general feeling of work all around you. Everyone is immersed in their job, and there is a certain amount of accountability in the workplace. You can get up for a coffee run several times a day, take a long lunch break, even come in an hour or two late, but there is little chance that you would put your feet up on the desk and watch re-runs of The Sopranos all day. Similarly, to a franchise's customer, a proper office can lend an air of professionalism, while a home office may strike potential clients as undisciplined or too informal.
My Franchise Agreement is About to Expire – Now What?
The answers to these questions will depend on the language of your specific franchise agreement, although some general principles can be identified: