If you are eager to start your own interior decorating business, but concerned about how much work is involved in getting everything set up, you may want to consider franchising.
Franchising happens when an established company allows someone to run a local business using the same company name, logo, products, services, marketing and business systems. The original company is known as the "franchisor" and the company that is granted the right to run its business the same way as the franchisor is known as the "franchisee."
You have probably bought products and services from many franchisees. For example, if you have ever bought lunch at McDonald's, Kentucky Fried Chicken, Burger King, or Wendy's Restaurants, you were buying from a franchise.
People who choose to franchise – rather than start their own business from scratch – often do so because they want to minimize their risk. They see the franchise as a proven business that already has name recognition among the public. (Although there is less name recognition for interior decorating franchises than for fast food franchises!) By working with an established system, franchisees hope to avoid costly mistakes and make a profit more quickly.
Franchises are also good for people who want support. Franchisors typically provide training to help franchisees start, market, and run their new business. The franchisee may receive assistance with everything from obtaining supplies to setting up record keeping systems. Many franchisors are continuously working to develop better systems and products, and you can take advantage of those developments. It is important to keep in mind that a franchisee does not own any of the trademarks or business systems. Also, a franchisee must run their business according to the terms of their agreement with the franchisor. For example, the franchisee may not be permitted to offer a sales promotion or use a supplier that has not been authorized by the franchisor.
While some people appreciate having such guidelines to follow, if you are an independent person who enjoys taking risks and being spontaneous, you might find owning a franchise to be too restrictive. Since someone else is ultimately "in charge" you may be wondering how having a franchise is different than being an employee. In fact, there are significant differences. For example, you have more freedom than an employee (e.g., you might choose your own working hours). And you could ultimately earn a lot more money than an employee.
On the other hand, franchisees must pay thousands of dollars up front for the opportunity to work with the business, and there is the possibility that the franchise will not be financially successful. Many websites on the topic of franchising claim more than a 90 percent long-term success rate for franchisees. However, the Business Link website (see resources below) cites a study reported in the Wall Street Journal which found a 35 percent failure rate for franchises. Your own success will depend on a variety of factors including your geographical location and the particular franchise you become involved with.
If you are considering franchising, do your homework and gather all the information you need to make an informed decision. What you receive for your investment varies from franchise to franchise, so make sure you know exactly what you will be buying and that any claims are substantiated. Before signing a contract, it is also wise to consult with people you trust to give you unbiased and sound advice, perhaps your accountant or attorney.
There are numerous franchises that touch on some aspect of home improvement or decor. For example, there are franchises to sell window blinds, frame art, or open a furniture store. In this article we focus on several franchises that involve interior decorating skills. You can find other franchises by doing a search at the International Franchise Association website.
Estimated start-up costs for an interior decorating franchise range from $19,000 to $195,000. (The higher figure is to open a retail store in a major market area.) The initial investment typically includes two components: (1) payment of a franchise fee and (2) other start-up costs.
Entrepreneur Magazine describes a franchise fee as a one-time charge paid to the franchisor "for the privilege of using the business concept, attending their training program, and learning the entire business." Other start-up costs may include the products and services you will actually need to run the business, such as supplies, stationery, advertising, etc
A franchise fee might be $12,000 with an additional $18,000 required for other startup costs. Or it might be $24,000 with an additional $6,000 required for other start-up costs. There are a variety of factors involved in determining the initial investment, including:
In addition to your initial investment, you can expect to pay the franchisor ongoing royalties. These royalties typically range from seven to 11 percent of your sales; the exact amount will depend on the company you franchise with.
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Note: This article was sent to us by: Victoria Liann at 03012010
1. Interior decorating is a visual business
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