By DON DOGGETT

Q: I want to start my own business. In considering my opportunities, I have become somewhat interested in obtaining a franchise. What are some of the pros and cons of such a move?

A: Some advantages of franchising are that you can start in business with:

• Limited experience needed. You are taking advantage of the franchiser's experience, which you might otherwise have to obtain the hard way through trial and error.

• Reduced amount of needed funds. A relatively small amount of capital and a strengthened financial and credit standing can result from going the franchise route.
Sometimes the franchiser gives financial assistance, making it possible for you to start with less than the usual amount of cash.

For example, the franchiser may accept a down payment with your note for the balance of the initial purchase price or allow you to delay payment of royalties or other fees in order to help you over the rough spots.

• Proven image. You are acquiring a well-developed customer image and good will with proven products and services. Therefore, your business has instant sales power. To develop such sales power on your own might take years of promotion and considerable investment.

Here are the disadvantages:

• Loss of control. The franchiser always retains certain degrees of control so as to protect the franchise name and reputation.

• Not always your own boss. In most situations, the franchiser has a right to dictate the number of employees and, perhaps, the skills of those hired and retained. The hours of operation and operating practices may also be the prerogative of the franchiser.

• Franchise fees. You must pay an initial and then a continuing fee to the franchiser. This fee is in payment for the wide range of support and the name and brand recognition most good franchises provide.

There are many sources of information about franchises: books, Internet sites, advertisements and general information from bankers, suppliers, business brokers and industry trade shows. After a review of franchise possibilities, select one or two that are of the greatest interest to you and write them, requesting copies of their official offering packages.

Once you have located an opportunity you're interested in, the next job is to evaluate it. A franchise costs money, hence it is vital for you to investigate and evaluate before you invest. A SCORE counselor is one of the resources available to help you with this important task.

Don Doggett is a management counselor for SCORE, Counselors to America's Small Business, a volunteer nonprofit association and a partner of the U.S. Small Business Association. For information, call 713-773-6565. Information here is intended to provide general information. Send your small-business questions to Small Business, Houston Chronicle, P.O. Box 4260, Houston 77210.

Source:Houston Chronicle