Question

Review table above which lists 10 franchise opportunities. In your opinion which is the most appealing to you and state your reasons why. Imagine the location would be in an area near where you live. Therefore, describe the opportunities your area offers that could make this successful.

TABLE 15.4 Initial Costs to the Franchisee of a Sample of Franchise Organizations Franchise Organization Year Started Company- Franchised Franchise Franchising Owned Units Units Fee Ongoing Royalty Fee Total Initial Investment 38 Anytime Fitness 2002 Budget Blinds 1994 Edible Arrangements 2001 Hampton Inn Hotels 1984 Liberty Tax Service 1973 Pinkberry 2006 Play It Again Sports 1988 Qdoba Mexican Grill 1997 3,386 1,087 1,245 2,148 3,753 242 285 6% $19,000-$37,500 $19,950 $30,000 $75,000 $40,000 $35,000 $25,000 $30,000 351 33 $449-$549/mth $80,020-$490,100 Varies $99,240-$202,070 5 % $196,610-$327,810 $4.2-$14.9 million 14% $58,700-$71,900 $310,842-S615,145 5% $240,300-$397,200 $851,600- $1,131,000 5% $159,224-$434,521 $164,950-$405,850 6% 359 330 5% The UPS Store Wetzel's Pretzels 1980 1996 6o 4,910 294 $29,950 $35,000 7%

Note: Please explain briefly.......

Answer 1

Out of the 10 franchise opportunities listed, in my opinion, the most appealing one is 'Liberty Tax Services'.

Reason for choosing this franchise :

   The initial investment for this franchise is the least. Also established since 1973, the 'Liberty Tax Service' is a well established tax filing company for individual and small-businesses, concentrated especially in the Eastern/Central parts of United States. Living in the Western part of United States, opening a franchise under the name of 'Liberty Tax Services' will open doors for the brand of tax consultants to penetrate into the other side of the US. Apart from it, there are millions of businesses thriving in any location in US, catering to various needs of citizens/immigrants/contract employees etc. Being located in a region near the Silicon Valley, there is ever growing demand for personal income tax filings and clarifications on the same. As its a region surrounding the Silicon Valle, all kinds of business thrive, namely, retail, manufacturing, outsourcing, services, infrastructure, medical etc.

Thus the potential for acquiring business is huge, especially with a goodwill that the brand name has created over these years. The Franchise Fee is second highest among the 10 franchise opportunities provided. But since this is a one-time fee, it is a justified payment as the consultancy business already start-up with a built-up brand for itself. Eventhough several individual tax consultants are available in the market, tax services are required by all and there would never be a dearth for business. The quality of service that is provided will determine the future growth of the tax consultancy business. As a major in tax, there should be no issues in providing quality tax consultancy services.

   The royalty that needs to be paid is 14% which is the highest charged from amongst the franchise listed. But since service business is a requirement for most individuals and for the brand name, the royalty fee can be accommodated by the sales revenue, eventhough at initial stages, it could be a challenge.