Dunkin’ Donuts Franchise: it’s Pros & Cons Since the year 2010, franchising has come to constitute a full 50% of the US retail economy. As the saying goes, the business of America is business. Business is not necessarily a free-market practice though, for instance even communists engage in commercial/industrial activity. But the US model of owner-run franchises is quintessential free-market activity.
There are many critics of the free market economy, but in its essence this is an economic order that is based on stewardship and nurturing of one’s resources. And on this backbone a world-wide trend towards small-business/ home business is in motion.
Don’t mistake me though, Mom & Pop’s stores still exist, it’s just that there is movement away from these to franchising and/or home business establishment.
In its execution franchising promotes the coming to fruition of human potential and not only of the franchisee but also further downstream. A frame of mind of giving ‘something back’ to the local community is, as an example, strongly emphasized.
The franchise way has proven to be a resilient business methodology because it imposes duties and obligations on both parties to the franchise agreement: franchisor and franchisee, namely:
Your Franchisee Duties & Obligations
· Becoming a family-member of a proven franchisor’s business model
· Maintaining the quality of the franchisor’s brand
· Ensuring ethical business practices
· Keeping in confidence the technical and proprietary information of the franchisor
· Paying on time the royalties most franchisors demand as part of the agreement
· Keeping to the letter and spirit of the Franchise Agreement
Franchisor Duties & Obligations
· Providing guidance, training and mentoring that ensure the success of the franchisor’s business
· Supply of or facilitating access to equipment and raw materials
· Globally marketing the brand
· Defining and keeping to the geographical demarcations of franchisors
How does it measure in terms of the obligations required?
What they need from a potential franchisee is:
1. Food service /retail experience
2. Passion for the brand
3. Engagement with the local community – e.g. $467,884 recently donated to Boston Marathon Bombing victims fund
4. Team leadership
5. Net worth per applicant of $500K and $250K liquid assets
For those who meet these requirements, this is a franchise with a low failure rate and therefore, profitable to be in. (100 million people in the U.S. alone drink coffee every day.) However, also based on these requirements, a Dunkin’ Donuts franchise is not for everyone who needs to start a business.
The hours are long and there is a strong need to be hands-on. As their ad goes: It’s a fast- paced job.
The franchising route has been called a trap by those who have entered it with a less-than-full understanding of the time and other demands it makes.
So as you dunk your donut and sip your coffee, do contemplate a broader scenario of business opportunities - many of them home-based - before you commit.
Till next time.
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