Franchising

‘The leech has two daughters: Give and Give. Three things are never satisfied; four never say,”Enough”.’ (Proverbs 30:15)

 My spouse has been thinking of venturing into some kind of small business when he retired. One day we received a flyer in our mail box and came to know that a franchise fair would be held in a convention centre. In the fair, we came to this printing franchise booth. We expressed interest in it since no investment in fixed assets and premise are required.  Moreover we were comfortable with the upfront fee, about 10k plus.

The ‘business model’ works like this. After paying the upfront fee, we are required to register the company with ARCA. After that we have to source for your own customers and quote own price whilst the franchisor will offer a partner price for the printing. The difference is the profit for us. The printing company supposed to offer some relevant training in products, sales and marketing.

Thank God that before we went for the 3-hour talk held at night at the franchisor’s office (quite sure there would be hard selling), we thought it would be better to search through the internet to see any review put up on this franchise. Indeed someone shared his bad experience of not getting trainings and lack of transparency. We learn some valuable points from this:

1. Do not spend money on any business idea that is not clear to you.

2. It is not easy to start a business - as you have to take care of many issues, such as marketing, finances, recruiting people, collecting debts etc.

3. It is better to help a friend to run an existing business, so that you are aware of the business issues, before you start a business on your own.

4. Read the terms of the agreement carefully before signing on the dotted line. Any verbal agreement is not enforceable.

5.You may have to incur follow-up investments, not just the upfront fee.

Come to think of it, the printing business is already highly saturated. Only large firms with capital and connections can profit in a big way. The rest survive on razor-thin margins.This printing firm makes a smart move to start its franchise scheme. Printing money this way is easier than printing leaflets and brochures. All it needs is to get 3 or 4 persons to sign up its franchise per month to hit at least half a million turnover a year.