Franchise Business Issues - Research Paper Example

The agreement is based on the periodic royalty payments made by the franchisee to the franchise, regarding the revenue generated from the business operation (Rupert et al, 2008).

In the context of selecting the appropriate franchise, various factors are considered, which include the requirements, its market viability, and competition among other factors. Therefore, as a start, it is financially rational to select a franchise with reasonable investment requirements (Mendelsohn, 2010, p.120). In Richmond, Indiana, there are numerous franchises already operating. One of the rarely seen but viable business opportunities is the Archive IT franchise. This is one of the potentially profitable franchises with many suitable features.

Archive IT is in a category comprising emerging industry franchises. Archive IT franchises deal with the provision of document archiving and digital scanning among other computer-related services. Their systems allow for record conservations, secure cloud access and the option of searching text stored. The mission of the company is to enable other businesses to handle the issue of data and information storage in a more advanced manner. The operating philosophy of the franchise is that in the near past, most companies have been struggling with the aspect of data storage in paperwork. Considering the next few years, many companies will go paperless. Therefore, this franchise aims at providing the best solution to the older resource-intensive data handling methods. This corporation began franchising in 2011.

This franchiser is currently selling franchises throughout the US. The total investment required from the franchisee ranges between $66, 350- $196, 300. The exact amount of the investment depends on many factors including the geographical location of the franchisee and the infrastructure proximity of the business. The franchise fee is $ 25, 000, with a periodic royalty fee of 5% of the total revenue of an operating period. Archive IT signs a renewable 10 years agreement with the franchisee upon assigning the operation rights to the third party. $100, 000 net worth, and $ 50, 000 liquid cash are the financial requirements of this franchise.

Given the financial requirements of this franchise, I would approach one of the financial institutions for a loan to cover the total investment value of this business opportunity.  If it was hard to acquire a loan from an established financial institution, I’d consider approaching a venture capitalist for financial support (Madura, 2009, p.90). It would be much easier to source the funds from the venture capitalist given the potential economic viability of the franchise. If I did not meet the net worth requirement, I would consider liquefying my some of my assets.

Archive IT provides a 2-week training for the franchisee upon entering the contract. There is also ongoing support through the provision of newsletters, online consultations, and regular field evaluations by the management. The franchise provides co-operate and regional advertising to the franchise once the business starts operating. As a franchisee, I would carry out intensive marketing throughout the city. I would employ marketing personnel whose duty would be to convey new ideas to any potential client. I’d also advertise my services through media channels like periodic magazines, radio and TV. The strategic position of the franchise in Richmond, Indiana would be along the 2 major highways; the US 40 and the US 70. This location will ensure optimal visibility of the franchise premises to most of the public, who could be interested in digital archiving services. 

This franchise is viable because thousands of companies in Richmond, Indiana would appreciate the advantages of this document management system. Companies are now dumping old paper archiving to adopt electronic archiving. In Richmond, Indiana, most companies are still using the old method of data storage in paper form. The introduction of Archive IT would be the best solution to the headache of managing voluminous data in offices. Therefore, this franchise is reliable and marketable due to its technical architecture on matters of data storage and handling (Archive IT Franchise Corp, 2012).