Starting a business can be a risky and daunting task, but opening a franchise can simplify and expedite the process while reducing risk.
Given the economic climate, a simpler, faster and less risky business model is attractive, said Chamber President Hunter Hall. The Covington-Newton County Chamber of Commerce is hosting a free Franchising 101 class at 6:30 p.m., August 25 at Hampton Inn, 14460 Paras Drive. Anyone can attend.
Hall would love to see an incubator-type system, which seeks to help unique start-up businesses but says that won't address immediate needs to get people back to work and bring more retail to Newton County.
"We've had a lot of discussion about incubator and would love to get it, but that's very cumbersome. In our economic times, and specifically given our desperate need for retail, that's why we're pushing franchising," Hall said Wednesday.
Franchising involves an entrepreneur essentially buying into an already successful company. The entrepreneur gets to open and operate that company's business, which already has name recognition, in a new market or location while generally paying a royalty or other fee.
The practice is best known in the fast food and gas station/convenience store industries, but can be used in a range of businesses, such as automotive shops, hotels, hair salons, retail stores and tax preparers.
"We know there is retail demand. Based on recent retail studies, the county is screaming for retail, which we believe franchising can help address," Hall said.
The free event will be hosted by FranChoice, a consulting company which helps match up entrepreneurs with appropriate companies for a franchise. Visit franchoice.com for more information.
Though much of the operation and marketing of a business is taken care of by the parent company of a franchise - which has to protect its brand name - the entrepreneur still has to be able to raise capital, generally around $100,000 to $200,000 to get started.
That's a daunting figure for most, but the class will help both those ready to start a franchise and those planning for the future. There are tips for raising capital, such as using a 401(k) as collateral for a business loan, Hall said.
In addition, Hall said the class could be a good opportunity for investors, who have money, to match up with operators or managers, who would have the industry-specific knowledge to manage the day-to-day operations of a business.
"Say I want to start a Firehouse Subs, because I feel I can dominate that market. I've never done food service, but I have the money to start the franchise and have a full-time job anyway. If I put in the capital and then find an operator to run it, then I can give it a go. It works out for both sides," Hall said. "This class is geared toward anybody with the entrepreneurial spirit."