Here are some facts that will help you choose between franchising or multi-level marketing.
Franchising has been defined as a commercial relationship that is composed of three influential factors and these factors are the use of marketing plan, trademark and franchisee fee.
A franchisee or the buyer is allowed to use the trademark of a popular brand with a franchise fee.
Franchisee fee is not a one time payment, as a franchisee you have to pay the franchise fee every year as long as you are using the marketing plan and trademark of the brand.
Aside from the franchisee fee, you also have to pay royalty fee. Royalty fee is a percentage of your earnings in relation to the sale that you have incurred while marketing the brand.
The royalty fee and the franchise fee do not include the products that you have to sell. For example, you are franchising a food chain, the franchise fee and royalty fee does not include the burgers, fries, juices that you will sell in your burger shop.
You have to buy the products direct from the franchising company and you have to remember that you are not allowed to buy any product outside the franchise company.
On the other hand, multi-level marketing is a business opportunity that gives huge income even without paying royalty fee and franchisee fee.
Meaning, in multi-level marketing, you do not have to pay millions of franchising fee or royalty fee. You can already be a member of multi-level marketing with just a small membership fee.
In addition, the membership fee in multi-level marketing is just a one time payment unlike the royalty fee that you have to pay yearly so not to loose the right to market the brand.
But if the business is not good, where will you get the payment for franchising fee and royalty fee? This is the reason why most franchisee investments are not long lasting because you have to pay millions of money for franchisee fee and royalty fee without an assurance that it will give high returns.
In addition, why choose to market products that will require you to pay them half of your earnings where in fact there are other business opportunities that will give the freedom to own and manage your own business investment?
As a whole, multi-level marketing is a better alternative than franchising because the terms of multi-level marketing is more practical, economical and gives higher returns of investment than a franchising.
Bio – Terry is a free lancer writer of www.smallbusinessmoney.org/ and he enjoys writing about business for home topics.
