Is a Dog Bakery Franchise for You?
Thinking of a dog bakery franchise? Understanding the advantages and disadvantages of a home business franchise will help you make a decision for your dog bakery business. Home based business opportunities vary greatly. Make sure you make an informed decision.
There are hundreds of franchises available for you to purchase. You will recognize many of them—like McDonalds or Dunkin Donuts. But they vary greatly in what they provide for you and what you can expect from them.Books have been written on home business franchises and how to decide whether to purchase one for your business. I will give you a quick overview here, so that you understand if this may be an option for you. If you are seriously interested, you need to do a lot more homework before arriving at a decision.
Advantages of a Dog Bakery Franchise
So, why would you decide to purchase a home business franchise? Here are some advantages that may be of interest to you:- Business model – the franchisor (This is who you purchase the franchise from...) has developed a business model. You just need to learn about their system and follow directions. Training does vary from franchise to franchise. Ask questions about this.
- Product or Service – a franchise has already developed the products that you will sell. Often they will sell the ingredients or products to the franchisees (that's you).
- Accounting and finance systems – Usually a franchise provides software for your accounting and records. This is also how they keep track of your sales, etc.
- Training – Usually a week to a month of training is provided at the company headquarters. Sometimes a company representative will come to your location to help you get started.
- Research – The company will keep track of market trends, etc. and provide its franchisees with information to help them with strategic planning.
- Quality control – the company has already learned the legal requirements and set up a quality control system that you are required to follow.
- Pricing – While the franchisor is not permitted to dictate pricing, they will give you guidelines to set your prices.
- Real estate – If your franchise requires purchase of a building, the company should help you with the selection of the site.
- Hiring and firing – the company may help you with guidelines for hiring and firing.
- Equipment – you will be told exactly what equipment is necessary to be in this business.
Disadvantages of a
Dog Business Franchise
While it may sound pretty good to purchase a dog bakery franchise and let someone else do the upfront work involved, there are some disadvantages to consider:- Cost – This can run from a mere $10,000 to hundreds of thousands. For example, in 2001, Auntie Anne's, the pretzel franchise, required that a candidate for a franchise invest between $156,000 and $252,000 – just to get started. Some of this can be borrowed.
- Fees – You will be required to pay an initial franchisee fee and often advertising fees (.5 – 4% of total sales), and there may be other fees. Make sure you understand ALL the fees and costs that you will be required to pay.
- Exclusive territory? -- This used to be one of the draws for franchises. However, franchisors no longer guarantee exclusivity. Don't expect protection on this front.
- Contract length – Make sure you understand if you are obligated to continue the relationship for 5, 10, or even 20 years – even if your business fails.
- Royalty fees – I'm listing this separately. They often range from 3 to 8% of your total sales. You will pay this as long as you are in business.
- Loss of independence – If you are the type of person who likes to make your own decisions, you may not like a dog bakery franchise. Decisions are often made, only with the blessings of the parent company.
How to Make a Decision
About a Dog Bakery Franchise
If you have the money and don't want to be bothered with the research and work required for a business start up, then you might be a candidate for a dog bakery franchise. If you think this might be for you, make sure you do your homework—before signing on the dotted line!Here are a few things that you should consider: - UFOC The Uniform Franchise Offering Circular – This is a legal document that all franchises are required to provide to potential franchisees (you). Read it carefully, and I also suggest that you have a lawyer read it also. Paying a lawyer to do this may save you thousands of lost or mis-spent dollars in the end. Do your due diligence!
- Call or visit current franchisees – Have a good list of questions to ask them. Often they will give you very frank information about the company. They will be one of your best resources. But do be considerate of their time. Franchisees are in business and often very busy. Don't take more of their time than necessary.
- Training – Often a franchisor will allow you to attend a training session even before you sign a contract. If you go, be aware that there may be subtle, or not so subtle pressure to become a franchisee.
- Income – Franchisors are not permitted to tell you what you can expect to make financially. Don't fall for the old “income on the napkin” trick. This is when the franchise representative writes a number on a napkin, since he isn't allowed to tell you an income number. Somehow, the napkin always ends up in the company representative's pocket! Hmmm...
- Know if you have an exit – What if your business just doesn't work out? What provisions are there for you to get out of the relationship—if any?
So, if you are considering purchasing a dog bakery franchise, make sure that you understand what you will get from the deal—and what you will be required to provide. Franchises are not for everyone, but they can be a great way to start a business, a business that has already proven itself. Without having to do all the research and development!
Whether you decide to purchase a dog bakery franchise or not, you will still need to follow some of the start up steps for any business start-up. Here is a dog bakery start-up guide that will help you, no matter what you decide to do... |
