Max Weber

Franchise business

First of all, let us define – what is a franchise? A franchise is an agreement between the franchisor and the franchisee, where the franchisor sells the right to sell the product or service.

First of all, let us define – what is a franchise? A franchise is an agreement between the franchisor and the franchisee, where the franchisor sells the right to sell the product or service. Everything to start and continue a business is provided by franchisor, in the case of Ralph Emerson this includes: financing of initial inventory and all required fixtures for ten years. Franchisor provides the buyer with the product (tobacco, pipe, cigars), trade name (Pipe Dreams), operating activities, management support, experience… You buy a made business, and in some way become a business owner. However, before deciding to buy a franchise, the person should thoroughly investigate and evaluate franchise market, offer, concept, support, performance, profit, sales, costs, and assets. There are many companies, accountants, lawyers who may help and check all required details. Also the person should take into account advantages and disadvantages of such a business.

Advantages of franchising include:

- risk minimization, while this is a proven and tested business;

- trade name, customers prefer to buy products of a well- known name, and reliable quality

- lower advertising costs

- support, experience, financing, training – all details how to run a business day by day are given by franchisor

 Franchise business gives you confidence from the start. The other important advantage of franchising is low business risk, compared to independent business. If you buy a franchise, you will have exclusive rights in your area location, while the franchisor will not sell other franchises in the same territory. The next advantage of franchise is that you buy a business with the volume of sales (the process of achieving sales volume in independent business is much longer).

Disadvantages of franchising are the following:

- total control; you will not be your own boss, you can not run the business as you wish; you are not allowed to make changes

- the process of buying the franchise is not cheap one

- personal or business conflicts may arise between you and the franchisor

- franchise fees, required purchases, termination details relate to disadvantages of franchise

- the next black side of the franchise is the limitation of market - only the defined territory

- If some other franchise, in the same network fail to

make high level quality, or make mistakes and give the brand bad    reputation, this will influence your business greatly.

Assessing all the advantages and disadvantages of franchise,I recommend Ralph Emerson to start his own business. Of course, he would need to make the trade name, reputation, and acceptance. However, there will not be any control over him, he would be free to make decisions, choose product, design, location, management…  Owning the independent business Ralph has to rely only upon himself, his abilities, skills, education, experience, and of course intuition. Every type of business requires hard work, planning, and dedication. Ralph Emerson has good ideas how to make the business successful, knows where to buy tobacco, how to make better deals and run the business. Shortly I believe that Ralph Emerson has all the required features to operate his own profitable enterprise.  

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