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Franchising - Identifying key advantages, risks and rewards

Announcement posted by MSI Global Alliance 18 Jan 2012

Having experienced a few years of tougher economic conditions those who want to get into business may wish to consider a franchise. Buying or starting a business can be an overwhelming experience, and so you need to take any advantages that exist. When buying into a franchise business there can be immediate benefits of accessing an existing known brand and operating system, rather than having to develop your own. The right to access the franchise system is what you are buying.

When getting into any business you will need finance for the purchase, set-up, stock and fixtures. Some of the franchise systems are accredited by lenders meaning the lender is more favourable in providing finance to these, which would be of benefit given the current financial conditions.

Although there are many benefits associated with a franchise, you will still need business skills to make it work. Your professional advisors can assist you with understanding profit and loss statements and balance sheets, explaining GST and BAS, setting margins, reviewing agreements and advising on tax related issues.

There is also the option for those who have started their own business, to consider whether their ideas and procedures are capable of being turned into a franchise. This avenue has a much broader requirement, as all procedures in your business must be fine-tuned and documented. It can be a long but rewarding process if you venture down this line.

The important thing is to take your time and do your research. This can involve speaking to current franchisees and analysing the franchise agreement and other disclosure documents obtained from the franchisor. We recommend that you seriously consider your key objectivesand what you wish to achieve and by when - both qualitatively and quantitatively .

If you are considering buying into a franchise - or setting up your own franchise – visit www.mxi-anz.net to find your local MSI firm.

About MSI Global Alliance:

MSI Global Alliance (MSI) is a global association of independent legal and accounting firms in Adelaide, Brisbane, Melbourne, Perth and Sydney www.msi-anz.net.