Inkjet Cartridge Recycling Franchises

Inkjet Cartridge RecyclingFranchises –  Are they Really Necessary?

Inkjet printer cartridges recycling franchises are available from anumber of well known brands such as Cartridge Depot, Rapid Refill Ink andIsland Inkjet to name but a few. The idea of such franchise agreements is thatfor a cost, the franchisee can leverage the brand assets and good will that thefranchiser has managed to develop over time. The franchisee then pays anon-going management fees, either directly or indirectly, which pays for themaintenance and on-going marketing and administrative costs of the centralcompany.

The costs of starting an inkjet recycling franchise variessomewhat from one provider to the next, however most require around $80,000 ininitial investment and it is estimated that around $120,000 is needed for otherstart-up costs that the franchiser will need to assume. However, the questioncomes down to whether or not, as a franchisee, you feel that these costs arejustifiable and likely to result in a return on investment that you would nototherwise be able to gain through trading without association with afranchiser.

For an amount ofaround $5,000 to $10,000 it is possible to acquire inkjet remanufacturingequipment and have the flexibility that is not offered by a franchise. Althoughyou will not be able to leverage the brand assets and the experience of thefranchiser, some may argue that you are certainly left with a lot of money toplay with when you consider that you no longer have the franchise costs to takeaccount of. Franchises will also place many restrictions on your business;limiting diversification, imposing corporate culture and setting rules whichapply across the board which do not take account of the areas and customersthat a franchisee serves.

The franchising model also has several disadvantages.The main one of which is that cannibalization of franchisees benefits theparent company through increasing overall revenue and initial franchise buys,whilst eating away at profitability of individual franchisees. For thosereasons alone, one should always check if there are limitations in place whichrelate to whether or not competing franchises are allowed to be set up in yourarea. If they are then this limits your opportunity to have a unique sellingpoint when you cannot compete on brand or price.

Choosing to acquire your own remanufacturing equipment isalso more sensible when considering that you can choose to scale your businessin a more comfortable fashion. When the franchise costs associated with majorinkjet franchise opportunities is so high, you need to be able to operate at alarge sales volume merely to cover costs and the opportunity cost of having thesame amount of money in a bank account. Being able to leverage an additional$100,000 to work in your business could allow you to embark on both direct andbrand advertising within your local area, effectively delivering the same valuethat the franchiser offers but in a way that is segmented to your local area.In doing this you also have an asset, rather than an on going cost, which issomething that is a vital element for consideration.

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This Article is written by John C Arkin.


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