It has become harder for entrepreneurs to get involved in some franchises. To become part of a franchise, higher standard requirements are needed. This has occurred because of the recession in the economy. In order to join a franchise entrepreneurs need to demonstrate that they have some knowledge on how to handle the business. Preferably it would be better for these people to already have a successful, running business that demonstrates their capability to take care of a business. Mr. Vojnovic says, "We're looking for those that have experience…sweating about payroll and paying taxes every month." Having experience gives a person who wants to join a franchise, a better chance to get approval to join.
Another reason it has become harder to join a franchise is franchises are demanding more money from prospect franchisees. At the same time banks are not willing to loan money to just anyone. A person has to look really good to banks in order for them to accept to give him or her a loan. If a person can't get financing, then his or her idea of opening a new franchised restaurant will not happen. Now it is harder to open a franchised establishment, unless a person has money and enough experience. Mr. Vojnovic also believes, “Popeyes restaurants that opened in 2008 and 2009 generally have better sales than those that opened earlier.” Because the standards are higher, the new franchised places that are being opened are of higher quality. The people who open these franchises are ones that have overcome and complied with the new, higher standards, which means they will be more likely to provide better services.
http://online.wsj.com/article/SB10001424052748704361504575552803956439716.html?mod=WSJ_Hospitality_leftHeadlines
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Its interesting how how companies had to take a hit to realize that they cannot be too lenient with standards. However, I do think that this is in the best interest of everyone as quality is sure to last when franchises are put in the hands of the right people. From first hand experience I have seen many world wide brands fail because their franchises were in the hands of those incapable of living up to the standards. Tihs will also promote good business ethics that will go a long way in developing a new, more powerful economic system.
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