Excellent business opportunities are not always easy to spot. While you might think you have an eye for them, the truth is making the final call of investing into something new or seizing one moment or the other is hard business. While it is true you could find good business opportunities hidden in pretty much any franchise or independent business you could be buying, a closer look can reveal something different. Namely, you will not be able to discover a franchise in each and every one of the franchises you might come across. Also, not all franchises might be for sale in the classic meaning of the word. To come to your help, we deiced to list some of the main criteria used to define business opportunities.
What Makes For A Genuine Business Opportunity
Business opportunities that focus on the sale or lease of a product, piece of equipment, or service and which allow licensees to start a business respect the legal statues of a business opportunity. The licensor-seller needs to be able to guarantee the fact that the income is going to be equal to or bigger than the price that the licensee-buyer is going to pay for the respective product. This price will be paid when the product is going to be sold again and when a market for the same product will exist.
The seller of the business opportunity also needs to officially state that it will be able to ensure or provide support to the buyer when needing to locate a proper space. The same seller also needs to be able to provide the respective product to the purchaser-licensee. There is also a certain fee that needs to be paid to the seller in order for the buyer to be able to start the business. The products created by the seller-licensor will also be bought by the licensee-buyer. The seller will also have to promise to buy back all of the products that were purchased by the buyer provided they will not be sold to the potential customers.
Federal Trade Commission Rules
According to the Federal Trade Commission rule that was originally passed in 1979, there are three main formats for business offerings. Product franchise, package franchise, and business opportunity ventures. The latter need to respect the following elements. The buyer of the business opportunity needs to distribute the products or services that are being supplied by the franchisor. Also, the same franchisor needs to ensure an account or an outlet for the respective products or services that need to be sold or distributed by the licensee. A written contract needs to exist between the licensor and the licensee. Also, cash transactions need to exist between the two parties that need to be of at least $500.
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