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Business Opportunity or Franchising? New Jersey

There are two effective ways to become a business owner without reinventing the wheel and starting your own business from scratch: buying a business opportunity and being awarded a franchise business. Each has advantages and disadvantages so knowing how each works and how you would fit their model is important before you begin your search for a particular business.

1. Local Companies

2. Business Opportunity

3. Franchise

4. Government Protection

5. Featured Local Company

1. Local Companies

NiteLites of Central New Jersey Outdoor Lighting
908-221-1022
58 Katydid Drive
Branchburg, NJ

Franchise Coaching Systems
732-528-4385
11 A Chestnut Lane
Brielle, NJ

Livingston Associates
(908) 317-5757
822 South Ave W
Westfield, NJ

Oil Butler International Corp
(908) 687-3453
1599 US Highway 22 W
Union, NJ

Integrated Systems Consulting Group Inc
(732) 748-4400
300 Atrium Dr
Somerset, NJ

Franchises Unlimited Inc
(609) 859-8686
18 Log Rd
Tabernacle, NJ

Cendant Corporation
(973) 428-9700
Parsippany, NJ

Valuation Consulting Group
(908) 317-5757
822 South Ave W
Westfield, NJ

Howard Johnson Franchise Systems
(973) 428-9700
Parsippany, NJ

Ag Business Connections
(973) 616-1085
Wayne, NJ

2. Business Opportunity

With a business opportunity, you buy and own a business outright and operate it under a name you choose. The seller makes his money by delivering the business system, training, equipment, or service method to the buyer. In some cases, the seller may also make residual income for the ongoing sale of products or services, but for the most part, the relationship is over once the purchase is final.

3. Franchise

A franchise opportunity is a relationship between a seller and a buyer that continues for the duration of the buyer's involvement in the business. A franchise differs from a business opportunity in two important ways.

First, a franchisor generally collects a franchisee fee up front from the buyer and also collects on-going royalties. What the buyer gets for these fees are access to a brand, a proven business model, comprehensive training and ongoing support.

The second difference is that in a franchise, the franchisor will require the franchisee to adhere to strict guidelines in the operation of the business. This is done because it is the franchisor's name on the business. The brand must be protected for the benefit of all franchisees in the system and the service or product provided must be consistent from store to store and state to state.

4. Government Protection

The Federal Trade Commission (FTC) regulates franchising at the federal level. In order for a business to be labeled a franchise, three elements must be in place:

1. Franchisor allows the buyer to use the franchisor's trademarks.
2. Franchisor collects a fee (of at least $500) from the buyer within the first six
months of operation.
3. Franchisor exercises "significant control" over the buyer's operation on an
ongoing basis.

The most critical FTC guideline requires franchisors to provide buyers proper disclosure information prior to finalizing the sale. This document is called a Uniform Franchise Offering Circular (UFOC) and will assist a buyer in completing the due diligence (the process of investigation into the details of a potential investment and the verification of material facts) before purchasing the franchise. In many cases, individual states have additional guidelines a franchisor must meet to sell franchises in that state.

The UFOC is of enormous value to a prospective franchisee and is the best way to differentiate the good franchisors from the bad. Franchisors must disclose any litigation they have faced, list all franchisees in the system and address turnover, terminations, etc. Although not required, the UFOC can also list the earnings potential for a franchise.

5. Featured Local Company

Franchise Coaching Systems

732-528-4385
11 A Chestnut Lane
Brielle, NJ
http://www.FloSchell.com

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Business Opportunity or Franchising? New Jersey

1. Local Companies

2. Business Opportunity

3. Franchise

4. Government Protection

5. Featured Local Company