Some franchisors offer training and financial planning or lists of approved suppliers. But while franchises have a formula and track record, success is never guaranteed.
The disadvantages include high start-up costs, as well as ongoing costs of licensing fees. Continuing with the McDonald’s example, the estimated total amount of money to set up a McDonald’s franchise is over 1 million złoty.
As a franchisee, you must also take into account costs such as:
Renting/Purchasing a property
Social Insurance Institution and tax office contributions
Employment and training of employees
Purchase of equipment and furnishing of premises
Insurance
Utility charges (electricity, water, gas, etc.
Marketing and promotion in the region
Another important issue is how the franchisee finances all of the initial expenses. Some franchisors do not allow the costs to be covered by bank loans or loans. A certain down payment is required. Only a smaller part of the financing may possibly come from a loan.
However, franchisees can benefit from subsidies from the employment office , which can cover most of the initial expenses.
There are companies and brands that publish inaccurate information and boast about revenues, rankings, and awards that are grossly exaggerated.
So franchisees may pay high prices for low value
Franchisees also lack control over territory or creativity in their business. Financing from the franchisor or another source may be difficult to obtain.
Franchise or Startup
If you don’t want to run a business based on someone else’s idea , you can start your own. But starting your own business is risky, although it offers both monetary and satisfaction rewards.
When you start your own business, you are on your own. There are many things that are unknown to you.
You don’t know if the product will sell. If customers uae email list will like what you have to offer. If you will make enough money to survive.
The failure rate for new businesses is high
Euler Hermes conducted an analysis which showed that in the first half of 2017, 418 companies were declared bankrupt. Young companies fact sheetexecutive summary templateoperational plan usually go bankrupt: after the first afb directory year of operation, 30% go bankrupt, and after 5 years – 70% of small and medium-sized companies.