@Jim
I need your opinion. To franchise business or not?
Just in the last few months, I have been planning to have my own milk tea business in the city. I am really a fan of milk tea drinks that is why I have decided to have my own maybe by this year. I have searched on how I can get one and I am now stuck in to options of having a franchise or to come up with my own business concept. Actually, I am not a graduate of any business related course that is why I am having a hard time deciding. I really need help from others and here I am asking people to give their opinions. So, what do you think should I do? Should I franchise the business or should I just come up with my own milk tea house? I would appreciate if you leave your comments and suggestions. It would surely help me decide.
6 comments
I hope to hear from the members of this community soon. I am trying to solicit opinions regarding this matter.
First of all, it's really good that you've decided to take an initiative to start your own business, not all have the courage to do that. But please bear in mind, that anything I say here is not in any way to offend you, it's just my honest opinion as a CPA in practice. In creating your own brand, it's a very steep line of business, since a lot of milk tea franchise are already there in the market, which means you'll likely to have a minimal market share. But, the costs here are very minimal, since there are no franchise fees and it gives you more independence in what your overall concept, flavors, social media advertising, etc. would be. In purchasing a franchise, it's quite costly, specially if you consider purchasing big brands. Franchise fees typically involves, processing fee, monthly royalties and even the ingredients or equipment are also included in the package. You'll also have less independence in the concepts, flavor and even the staff, since some of the franchise, staffs are also part of the package. But you don't need to worry about the marketing and promotions of your product, since it's already known and the process itself in establishing the business is provided by the franchise provider. So if you have a decent amount of money, you should probably purchase a franchise. But, if you have a minimal budget, you should create your own, but it would really be a rigorous process and it would not be easy. But think of it this way, you can learn how to start a business and what ever happens, you'll forever know that and can open other line of businesses if you wanted to, you can use it as an experience. But hey, it's still your opinion, I'm just here to give pros and cons. Thank you so much for reading.
This would really help a lot. Thanks a lot. Actually, I have a limited budget and I would like to come up with my own. However, I do not have any business experience that is why I would like to franchise in the meantime. The franchisor allows me to customize my own shop particularly the design. My problem now is if I continue the franchise, almost all the money I have will go to the franchise fee, and I will only have a little for the establishment. What do you think of this? Actually, the store will just be small. Is the interior design of my future milk tea shop a primary consideration? Should I put more money into it?
You should also consider that monthly franchise fees will occur, whether there had been sales or not. For the interior design, I think it's a must, considering it's a factor for customer satisfaction but due to Covid 19, you should reconsider since govt regulations limit dine in in establishments, so I think it should not be a primary focus, but later on, it may require an upgrade.
This is really a good point. I am taking this into consideration. Instead of having an expensive interior design I might just go with a simple one for now. At the same time, I will not install yet an airconditioned unit since customers will not stay long in the shop. All of the renovations will just come after a few months and I might do ot gradually. Thank you so much for taking time to write for me. I got an instant business adviser š
Sure thing, I was glad to help :) I hope your business would do well :)