Is Owning A Franchise Right For You?

(Thursday, May 24, 2007) - When Colleen Cavalieri launched her home-based business at the Naval Academy, she didn't have to start from scratch.
Ms. Cavalieri, whose husband was transferred to the academy last fall, is the local franchise owner of TSS Photography, an on-site youth and sports photography company with more than 225 units across the country.
She signed a 10-year franchise agreement that gives her the marketing power of an established brand name and the security of a corporate network.

"We're locally owned, but we're nationally supported," she said. "If something happens to us, headquarters is going to take care of customers."

Across the country, entrepreneurs such as Ms. Cavalieri are starting franchise businesses. Demand is so high that between 2003 and 2005, nearly 900 new franchise concepts began franchising, according to Washington-based International Franchise Association. In Maryland, there are more than 13,000 franchise establishments with 180,000 employees on the payroll, the association found in 2004.

But as with any business venture, owning a franchise means hard work and commitment, with most agreements lasting about 10 years.

"You're going to be involved in a long-term arrangement with this company so you want to make sure this is something you want," said Terry Hill, a spokesman for the franchise association.

Although buying a franchise means "most of the bugs have been worked out for you," he said potential investors must research their market and talk to other franchisee owners before signing on the dotted line.

"What you want to know is what their experience was," Mr. Hill said. "It could be they did well … It could be just the opposite."

He recommends that franchise owners hire an attorney to help them navigate through franchise disclosure documents and turn "fine print into plain English." The documents outline a franchisee's obligations and terms of the agreement, Mr. Hill said.

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