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With the Price of Information Getting Close to Free - Is The Franchise Industry In Trouble?

April 09, 2012 | Comments: 0 | Views: 151

Back in the 90s when I was franchising my company, often franchisees would ask why an Earth they should buy a franchise. Generally, I would tell them because I had built all the mistakes out of the business model, and we just knew what we were doing, and it would take them far too long to go through that same experience curve, at a great cost to them. However, if they bought a franchise, the $20,000 franchise fee would give them access to our business model, and all the information and proprietary knowledge that we had. Okay so let's talk about this for second shall we?

You see, with the price of information getting close to zero or free, this could spell a disaster for the future of the franchising industry. After all, if someone can learn all the information they need off the Internet, and there is so much information available, why should they buy a franchise in the first place? One could say they should buy the franchise because of the brand name, the buying power, the economies of scale, but it would be hard to say that they should buy it strictly for the proprietary information that they don't have access too - because they do.

If the value, even if it is only the perceived value, of information is zero or free, then $20,000 franchise fee would be considered too much. Are you beginning to understand my point here? And even if it is worth the $20,000 franchise fee, which I still believe today it would be, I also realize that it will not be valued by the franchise buyer as it might have been in the past, let's say back in the 90s when I was franchising my company. You see what I'm saying here?

Yes, and I realize that there is a difference between knowledge and know-how, and actually putting it into practice. Just because you read how to do something, does not necessarily mean you don't need at least some training. There's nothing better than on the job training or learning from doing where one also picks up a lot of information, which may or may not be able to be put into words. Nevertheless, there are YouTube videos people can watch of other people doing, and humans are very good imitators much like their very similar chimpanzee cousins.

There have even been some futurists put forth business plans for small businesses, and say to improve job growth we need more turnkey small business blueprints for startup entrepreneurs. If something like this were ever put into full practice on the Internet, where folks could download just about any business model or business plan for free, or for a very low price such as let's say $.99 on Amazon, then why on earth would anyone ever buy a franchise and pay 7% royalties and a $20,000 franchise fee? You see my point again?

Please consider all this and think on it, because basically that's what's happening now, and although not all this information is in one place, someone who wants to start a business of any type, in any industry sector can find a blueprint, business plan, and operational information online.

Lance Winslow has launched a new provocative series of eBooks on Business Topics. Lance Winslow is a retired Founder of a Nationwide Franchise Chain, and now runs the Online Think Tank;

Source: EzineArticles
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Price Of Information


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