Connect with us

Researching a Franchise

Franchise or Biz Op

How to tell the difference between a franchise and biz op and determine which is the better fit for you.

Jeff Elgin

Published

on

099

You can start your own business from scratch or choose from thousands of franchises and business opportunities, in practically any field you want. In fact, there are so many different opportunities and alternatives available that it’s sometimes difficult to figure out which is the best path to follow. Once you decide you’d like assistance in starting, you still need to understand the differences between franchises and business opportunities and how to choose which is right for you. Franchises and biz ops are fairly similar, but they do have a few distinct differences, in four key areas:

1. Common Brand and Operating System

One of the tenets of a successful franchise system is that all units operate under a common brand and operating system. This is how a consumer knows a Big Mac will be the same in Johannesburg or Cape Town. A franchise system makes a concerted effort to ensure that every operator is doing things the same and every unit is supporting and reinforcing the brand.

In a biz op, there’s typically no requirement to operate under a common brand, though some biz ops do let you use their brand if they so choose. In addition, since the focus of a biz op is on setting you up for operation, very little consideration may be given to imposing a common operating system after the business opens. You normally get extensive suggestions about the most effective way to run your business after opening, but they are suggestions rather than rules.

2. Ongoing Support

A franchise typically has an ongoing commitment to support you over your entire tenure in the business. These support programmes usually involve structured periodic contacts with dedicated support personnel for marketing, staff training, technology and virtually any other aspect of ongoing operations.

Though a biz op may also offer you ongoing support, the process is usually very informal and not based on any contractual commitment. Usually it is demand-driven, as the biz op owner responds to requests for assistance. They typically don’t have dedicated staff for ongoing support needs and won’t conduct such activities on a proactive or periodic basis.

3. Ongoing Fees

As a franchisee, you typically have a contractual commitment to pay the franchisor ongoing fees (royalties) in exchange for the continuing right to use the brand and operating system. These royalties also help the franchisor to pay for the dedicated staff and programmes they use to provide ongoing support to you. Royalties can be a fixed periodic amount or may be expressed as a percentage of your sales.

A biz op usually doesn’t have any such ongoing payment commitment. In fact, the presence of an ongoing payment obligation is one of the legal tests used to determine if an opportunity is a franchise versus a biz op.

4. Legal Disclosures

The final key difference between these two types of opportunities is related to the legal restrictions associated with the sale of the business to you. These typically involve complying with the laws and regulations in terms of required disclosures made to you during your investigation phase of the process.

In a franchise, these requirements are very stringent and centre around a document called the disclosure document. This document contains a wealth of information about the company and the opportunity being offered, including the history of the operation and key employees, any litigation or bankruptcies, all fees and costs, all rules and restrictions related to the business operation and the audited financial statements of the franchise company.

A business opportunity is not required to prepare and deliver any document like the disclosure document, though it may have to meet state requirements related to disclosure. In any case, you’ll typically receive far more legal disclosure information from a franchise than a biz op. This doesn’t mean one is better than the other, it just means you’re probably going to have to do more of the work yourself to make sure you have the information you need from a biz op than you will from a franchise.

You can safely assume that your initial and ongoing fees associated with a franchise will be greater than for a biz op. If you choose a good franchise, the tradeoff is that your risk of failure should be lower and the profit you make in the long term should be higher. If you don’t believe that to be true, there’s no reason to pay the higher fees associated with a franchise.

Weighing up the Options

A biz op also allows you to change the business into whatever you want it to become – rather than being restricted to a common brand and operating system. If you are a true entrepreneurial type, you might find that a biz op is more attractive to you because of the flexibility you’ll have in the beginning and as you operate the business over the years.

There is no right answer in terms of which strategy is better – it completely depends on the business model and your philosophy about what you want to accomplish. A careful and thoughtful analysis of your personal goals for establishing a business should help steer you in the direction of the type of opportunity that is best for you. 

Jeff Elgin has developed a consulting system that matches pre-screened, high-quality prospective franchisees with the franchise opportunities that best fit their personal profile.

Advertisement
Click to comment

You must be logged in to post a comment Login

Leave a Reply

Researching a Franchise

The Digital Headaches Of A Franchise Marketing Team

Here are my top 5 tools that can help control and regulate franchisees marketing with minimum friction.

JG Bezuidenhout

Published

on

digital-marketing-tools

Franchise marketing teams already know that managing campaigns for a business with multiple locations and/or stores is a time-consuming job.

When it comes to online marketing, many franchisees are frustrated with the mother brands’ national campaign strategy, as it may not suit their immediate needs. This often means they embark down the dangerous route of “rogue” or unapproved campaigns.

This is a huge risk for any brand as there is limited to no control over the message and quality of creative, often resulting in brand CI and best practices not being followed.

Rogue advertising can be totally avoided by a franchises’ marketing team by employing tools that allow them to set up a managed process where franchisees can advertise through. With a managed approval process (preferably automated) it is easier to manage “rouge” content.

Here are my top 5 tools that can help control and regulate franchisees marketing with minimum friction.

1. Create a consistent Facebook content experience whilst still allowing your franchisees to post to their own page

Facebook location pages makes it possible to, as an alternative, allow every store to open a Facebook page, each with different versions of your logo as their profile picture, as well as incomplete profile data or even old or past promotions as their cover image. You as a brand manager can set up each store as a location page on the brand’s main FB page.

The pages can all be linked to the main page and if you change the profile image or cover art, it will automatically update all the other pages. There are also a number of other marketing advantages to this, but most importantly for me was the ability to manage them all from a single interface and clean up all the old and abandoned pages that just confused customers.

2. Manage social media content

Gain is extremely simple to use and connected to all the popular social media platforms such as Facebook, Twitter, LinkedIn etc. As a user, you can create posts or ads and schedule them all from the same window. Once said posts are scheduled, the marketing team can preview the content and approve it for publication or request changes all within a matter of seconds.  Best of all, nothing will get posted without your approval.

3. Free professional looking content in a template

Pablo is an old favourite of mine! It supplies predefined size templates where a user can use free professional stock photos and quickly overlay text. The feature I love most on this tool is the “insert logo” feature, which with the click of a button can overlay a banner or brand element that creates consistent content experiences. Once done, you can export the image and post it to gain for approval. Simple right!

4. Create email alerts for when your brand is found online

Talk Walker alerts is a nifty tool and acts like your personal internet detective who constantly crawls the internet for keywords that you define. I like to use my clients’ brand names and sometimes even my competitors just to keep tabs on their activity. Once set up, you receive daily emails with links to the content in question.

5. Pre-approved marketing creatives and targeting with machine learning optimisation

Lead Gener8or tool can define a bespoke target audience per store and lock advertising geographical areas to prevent any cannibalisation. Once completed, franchisees can execute pre-approved marketing campaigns as and when they wish on any of the integrated channels (SMS, Email, Facebook, Google and Youtube), without any further involvement required from the marketing team.

Powered by big-data machine learning, campaigns are automatically optimised while in flight. Marketing teams can monitor all campaigns in real time. This tool really is a game changer for franchise marketing teams and brand managers.

With these tools correctly implemented into your business, the digital headache of your franchise’s marketing team can subside and focus on what you do best, delivering results!

Continue Reading

Company Posts

Choose A Job You Love, And You Will Never Have To Work A Day In Your Life

Join Col’Cacchio’s 26-year-long love story.

Col'Cacchio

Published

on

colcacchio-pizza-franchise-food

Vital Stats

  • Joining fee: R125 000
  • Monthly management fee: 6% of turnover
  • Monthly marketing fee: 2% of turnover
  • Total investment: approx. R2.5m to R4.2m (turnkey) Size: 140m2 to 350m2
  • Unencumbered cash (before loan): 50% of total investment

(Above figures exclude VAT) 

“Owning your own restaurant is like owning your own future.” – Dominic Dempers, Franchisee Durbanville, Belvedere & Meadowridge Cape Town

We’re looking for passionate franchisees who will love our brand as much as we do.

Why you should join this delicious success story

colcacchio-pizza-franchise-dessert

  • Assistance with site selection & lease negotiation
  • Store design & build
  • Full training provided for management and staff
  • Marketing & operational support
  • Product innovation & menu development
  • Efficiency in all systems
  • Healthy margins.

Related: 300 Business Ideas To Inspire You Into Entrepreneurship

#FoodwithaStory

“Our journey started with a single restaurant on the foreshore with the aim to serve the very best pizza around” – Greg Mommsen, Business Development Director

“Watching this brand grow and empowering people has been immensely rewarding. We have staff that have been with us for over 20 years. It’s like a family, we work hard, we laugh, we cry, we celebrate and of course, we eat a lot of pizza.” – Michael Terespolsky, Founder and Managing Director

“Becoming a franchisee is an amazing opportunity to join the family and become part of the Col’Cacchio success story. We’re 100% behind out franchises at every step, making sure that we all continue to learn and flourish” – Greg Mommsen, Business Development Director

“It has been filled with challenges along the way, but all the rewards have made every moment worth it.” – Michael Terespolsky, Founder and Managing Director

Related: Got An Awesome New Business Idea? Here’s What To Do Next

Visit www.colcacchio.co.za or call Tarryn Godley on 084 800 7264 and let’s get this adventure going.

Continue Reading

Company Posts

Smoothie Franchise Opportunity: Puré Frooty Is A One-Of-A-Kind Smoothie Franchise Business

Looking for the next greatest franchise opportunity? Puré Frooty Smoothie is a highly perfected Australian business model launching in the South African market that doesn’t require extensive shop fitting or a large workforce.

Pure Frooty Smoothie

Published

on

saying-no

Vital Stats

Puré Frooty Smoothie is a unique business model to the South African market. A delicious, fruit filled smoothie will be created at the touch of a few buttons.

An Innovative Franchising Concept

This innovation in the healthy smoothie industry is ground breaking for South Africa. The machine is manufactured in Australia by a highly skilled team. It took six years to perfect this business model for the consumer market.

The vision of Puré Frooty Smoothie is to offer convenient on-the-go smoothies for anyone. The experience and quality will always be of the highest standard. We aim to be a staple convenience in malls, schools, office parks and hospitals. This is a platform that will allow for self-growth for passionate entrepreneurs.

Our mission is to create a unique customer experience. We want to satisfy the nutritional needs of customers by providing quality smoothies. Puré Frooty Smoothie will be packed with all the goodness a smoothie should offer.

Related: Why Your Franchise Should Adopt A Shared Value Business Model

The four values we pride ourselves in are:

  1. Convenience
  2. Consistency
  3. Quality
  4. Customer Satisfaction.

Why Consider This Franchising Opportunity

healthy-smoothie-franchise

Extensive research into the business model and market

Puré Frooty Smoothie was an idea, researched widely, by people looking to simplify the business process for the consumer and business owner. There was a gap in the market for simplified customer service and a demand for a quicker turnaround time.

Simplified process for setting up a business

For an entrepreneur it can be very overwhelming to start or buy a new or existing business. There are so many crucial decisions that need to be made from the beginning and new concepts to adapt to.

Puré Frooty Smoothie simplifies that drastically:

  • Free-standing machines: The business model revolves around a free-standing vending machine which needs to be visited to refill and maintenance.
  • No shop-fitting required: There is no need for shop fittings or a large work force. All that is required is an inside space for the machine with a power supply.
  • Minimal human resources needed: In terms of a work force, you could either do it yourself or have one person to assist you. There is also a part time involvement where refill station teams can refill and maintain the machine.
  • Cashless business: The business is completely cashless so there are no worries of a note jam, full cash canister or insufficient denomination rand values. More importantly the machines would do a higher turnover than an ordinary vending machine so safety of no cash is important.
  • Easy tracking of stock and performance: A cloud-based system is linked to the point of sale which allows you to monitor your performance and stock from the back-office platform at any given time.
  • Efficient handling of maintenance: With a live point of sale system, the business is linked to a software which monitors the operations of the machine. Should anything malfunction an immediate notification will be sent with a diagnostics report.
  • Human error is eliminated: Everything is done with a computer which leaves little to no room for errors. It is self-order and very user friendly.

Related: SA Fast Food Franchising On The Rise

Why Will Customers Love It

Puré Frooty Smoothie offers a vending machine that can produce a delicious smoothie in forty seconds. An informative touch screen ordering panel which displays all the nutritional information of the smoothie ordered and has the current news and weather.

No time wasted for the consumer. In fact, it’s a learning session disguised as a waiting period. The machine has two wash cycles after every smoothie is made to be freshly prepared for the next smoothie, business hygiene is important.

Consumers live in the fast lane. We are looking for something quick and most times we would like to be healthier. With the hustle and bustle of today’s life every little bit helps. Puré Frooty Smoothie fills that gap in the market.

Interested in Becoming A Franchisee?

Visit our Franchise Info Page for everything you need to know about how to become information a Puré Frooty Smoothie Franchisee owner.

You can also call or write to us:

Phone / 012-942 6360
Email / info@purefrooty.co.za 

Want to know more about this franchise? Watch the video below for more.

 

ent_mag_6-11-18

Continue Reading
Advertisement

SPOTLIGHT

Advertisement

Recent Posts

Follow Us

Entrepreneur-Newsletters
*
We respect your privacy. 
* indicates required.
Advertisement

Trending