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The role of the entrepreneur is pivotal to our local, regional, and national economies, especially in these challenging times when job creation is at a premium. Apart from the natural fondness that communities have for their mom-and-pop establishments, small business owners are extremely important because of their profound impact on the success of a community. Economic studies show that companies with no more than 500 employees are credited for half of the US gross domestic product (GDP), generate more than 60% of the total number of new jobs created since 1993, and employ 50% of the private sector workforce.
Part of the larger small business population is made up of franchised businesses. For the past few years, franchised small businesses have accounted for millions of jobs in both production distribution and business format franchises. To provide a better idea of the importance of starting a franchise, its employment is almost equal to the number of jobs in durable goods manufacturing. It also surpasses the total employment of various industries including wholesale trade, real estate, finance and insurance, information, and non-durable goods manufacturing among others. If we include indirect employment in the picture, the overall output produced by franchises amounts to over a trillion dollars.
Economic challenges of the franchisee
With many countries striving for economic recovery, the proliferation of entrepreneurs remains more important than ever according to businessnewsdaily. While there have been indications of economic growth, the rate of employment leaves much to be desired. Franchise businesses consider access to capital as a primary concern. Many of the recent difficulties faced by franchise owners include anything from recurring sales-related worries to credit struggles, which worsened because of the causes of this particular economic slump.
The global recession officially ended in mid-2009, but economic activity remains plagued by continued weakness and uncertainty, specifically in the labor industry. However, economists have grown more optimistic about economic progress because of the rising demand for goods and services and higher capital spending. That being said, franchise owners still have a number of challenges that they need to overcome. For instance, they have higher expectations about sales projections and hiring, but the reality is that economic activity is beneath the target. This newer optimism must still translate into actual employment and spending activity.
The law mandates the need for franchisees to know everything about the Franchising Code of Conduct. This Code contains the contents of the franchise agreement, as well as the obligations and rights of the franchisor – take a look at franchiselaw.net. There are more than 75 industries that utilize the franchise model and determining the most suitable one for you can be daunting if you do not know what questions to ask yourself.
First, a prospective franchisee must have a clear idea of what he or she plans to get out of having a business. The type of industry that one chooses must be in line with his or her interests and abilities, as well as the person’s personal routine. Naturally, the potential income and expenses should also be taken into consideration. If these guide points are not enough to lead you to the right direction, there are professionals like franchise consultants, lawyers, and development companies that can help you reach a decision on franchising.