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.
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.
- 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
- 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.
“Our journey started with a single restaurant on the foreshore with the aim to serve the very best pizza around” – Greg Mommsen, Business Developer 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 Developer 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
Visit www.colcacchio.co.za or call Tarryn Godley on 084 800 7264 and let’s get this adventure going.
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.
- Brand: Puré Frooty
- Established: 2017
- Website: www.purefrooty.co.za
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.
The four values we pride ourselves in are:
- Customer Satisfaction.
Why Consider This Franchising Opportunity
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 / email@example.com
Want to know more about this franchise? Watch the video below for more.
4 Top Tips To Find Your Best Franchise Opportunity
The President’s recent Job Summit highlighted the critical need to reduce unemployment. The franchise sector employs 369 573 people, 93 percent employed by individual franchisees rather than franchisors.
Several years of strong sectoral growth combined with business opportunities that are often backed by an investor safety net is making franchising the top choice for many who want to own their own business. This assessment is based on the strong foundations of my own experience of establishing Cash Converters nearly a quarter century ago and the recent results of Franchise Association of South Africa (FASA) annual industry survey.
These figures show that the SA franchise industry has grown its turnover by 55 percent from R465 billion in 2014, when FASA conducted its first survey, to R721 billion in 2017. Alongside this, the sector’s contribution to South Africa’s GDP has expanded by 62 percent, from 9.7 percent in 2014 to 15.7 percent in 2017.
The President’s recent Job Summit highlighted the critical need to reduce unemployment and boost the national economy by growing business and stimulating job creation. The franchise sector employs 369 573 people, 93 percent employed by individual franchisees rather than franchisors.
Franchising can be a win-win for franchisees. It enables you to make your dream of running your own business come true as well as contributing to providing much-needed new jobs.
These factors make franchising a particularly attractive option for those wishing to start their own business. But with 865 different franchise systems active in the country last year, the huge range of choice can be confusing.
To prevent analysis paralysis and ensure you can get set to make the most of franchising, I can offer four top tips for selecting the best franchise opportunity for you:
1. Choose a credible brand
As you shortlist franchisors that appeal to you, go beyond what they tell you about themselves and find out about what people are saying about them. Do social media searches to find out how consumers are reacting to the product or service offered, pricing and customer service. Your franchise fee should buy you a halo effect thanks to your franchisor’s good reputation. Too much negativity around the brand will affect the potential success of your franchise, from your ability to attract customers and the turnover and profit you can hope to generate.
2. Look for a proven business model
A worthwhile franchise shares with franchisees the intellectual property it has developed over the years. It has created and grown this business model over time, knocking off rough edges and fine-tuning systems for mistakes as they become apparent. Check the brand’s news history online as well as its own sales material. Be wary of any franchise that claims to be perfect or invincible.
Nobody is – so either it has something to hide or it is fooling itself. Either way, such a brand is not keeping its eyes open to navigate the brand and its franchisees through the changing fortunes of business.
Related: Thinking Of Going Into Franchising?
3. Check the support systems
Getting relationships and systems right is vital in business success. They have become even more important since we founded Cash Converters nearly 25 years ago because the volume of legal compliance has mushroomed. Make sure that the franchises you shortlist offer you support in coping with this and that those running the brand are in touch with what happens on the ground in the franchisees’ stores. At Cash Converters, for example, our front-end support staff are in stores every day and the directors devote three days each month to visiting stores. This ensures that our expertise is available to guide the franchisees through any business issues they face.
4. Follow the recipe
When you sign up with a franchisor, you receive access to its business model, including the “recipe” for running your franchise. This forms a kind of safety net so you do not need to reinvent a wheel when setting up your business. But you cannot complain that the business model does not work if you do not implement it. This is one of those times when you must follow the recipe to bake the cake successfully. If you are not the kind of person who wants to do that, then think again about whether franchising is for you.
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