Pros and Cons of a Tanning Salon Startup Franchise
As you know, there are pros and cons to almost everything in business. That remains true when opening a new tanning salon and having to decide whether or not to build a salon from the ground up, or buying in to a franchise. These Pros and Cons outlined below should help distinguish between the major differences between a franchise and a non-franchise tanning salon startup.PROs:
1. A strong Franchise name.
2. A Business in a Box theory (pay a total opening price for equipment, software, product).
3. Receive training, marketing and other support on a continual and ongoing basis
4. Offered products or equipment that might be exclusive to just the franchise.
5. Support in business design and layout and location scouting.
6. The level of quality customers receive from each franchise store would be the same.
7. Franchise purchasing power. Buying products and or equipment in larger quanities, can lead to better and deeper discounts.
CONs:
1. Higher Start-Up Cost. Franchises will have a list of equipment that they feel is correct for your location and or business, this will lead to more out of pocket expense.
2. You are required to share your banking and profit information. You also conform to uniform operating procedures.
3. Every year you will need to make royalty payments for using the franchisor name. Every month you will make payment to franchisor for a percentage of the profit you made. This sometimes can be up to 15% of gross sales. Your monthly or yearly payment amount is still due if business is slow.
4. No protected territory for your business. Franchisor has the right to put locations where they feel is profitable, unless otherwise stated in your agreement.
5. Most franchises are held to a long-term, 10-20 year commitment.
6. Some franchise may not be known or popular in your state or city.
7. You are more of a manager than an owner. Being a franchisee places many aspects of your business in the franchisor's hands.
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