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Is Buying a Franchise Right for You?

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Is Buying a Franchise Right for You

The best time to buy a franchise may just be right now. According to a Franchise Resales report[1], the current demographic and financial ecosystem is ripe for buying franchises. There is greater access to capital for starting your business than ever before and many baby boomer franchisees are now retiring and their franchises are up for grabs.

Franchises as a concept have become huge all across the world from Dominos pizza and McDonald’s to Subway and Supercuts. A franchisee[2] invests money to set up an outlet or franchise. The franchisee then pays a royalty fee to the corporation and keeps the remaining profits for herself. A franchise is a great way to take advantage of a business model that has proven successful and creating a business that is still your own.

Although a franchise does have the advantage of an established business model and operating standards, setting up a franchise is no walk in the park and comes with its own downside. Here’s what you need to consider to find out if buying a franchise is the right decision.

It’s like any other business; so you need to be mentally prepared for it

Although a franchise has the advantage of an established business model, it still means setting up a business. This means making sure you have enough capital to make the initial investment to set it up or to make a purchase if you are planning to buy an existing franchise.

You also need to make sure you have enough savings and resources to be comfortable with not having any income for at least a year as most franchises will need this time to break even. It’s also important to make sure you have the support of your spouse or family and close friends so that you don’t undertake such a risky journey[3] alone.

You have less freedom as a business owner

If you decide to buy a franchise, you will have to follow all the operating, product and marketing guidelines that come from the corporation. If you’re the kind of person who thrives on having a lot of flexibility and freedom then buying a franchise may not necessarily be the best way to become a business owner.[4]

Do you have the right franchise in mind?

While a franchise system means you have access to business support and a brand reputation, not every successful franchise will be the right choice for you. The success of your franchise will depend on how suitable the franchise is for your geography and demographic[5], how passionately you feel about it and how good you will be at marketing it locally. These factors are very important when it comes to deciding which franchise you want to buy. You also need to make sure that the franchise has a robust training system and that all the legal documents are in order before you cross the t’s and dot the I’s.

At the end of the day, a franchise is a great way to limit the potential downside of entrepreneurship, especially if it’s your first venture. At the same time, it’s important to make sure that being a franchise owner is suited to your temperament. If so, you should buy the right franchise that complements your skills and business acumen.

[1]http://www.prweb.com/releases/franchise/resales/prweb11071317.htm

[2] https://www.businessnewsdaily.com/5047-franchise-sales-market.html

[3] https://www.franchise.org/is-franchising-right-for-you

[4] https://fleximize.com/articles/011588/buying-a-uk-franchise

[5] https://www.thebalancesmb.com/pros-and-cons-of-buying-a-franchise-2951165

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European lenders exit Amazon oil trade after scrutiny by campaigners

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European lenders exit Amazon oil trade after scrutiny by campaigners 1

By Brenna Hughes Neghaiwi, Matthew Green and Simon Jessop

ZURICH/LONDON (Reuters) – Credit Suisse, Dutch lender ING and France’s BNP Paribas have decided to stop financing the trade in crude oil from Ecuador, the banks said on Monday, following pressure from campaigners aiming to protect the Amazon rainforest.

The role of European lenders in backing the trade came under scrutiny in August, when a report by advocacy groups Stand.earth and Amazon Watch named six European banks as major financiers of Ecuadorean oil exports to U.S. refineries.

Indigenous leaders battling to prevent further oil exploration in their territory said the banks’ role had made them complicit in oil spills, violations of land rights and the destruction of rainforest by Ecuador’s oil industry.

“The banks’ commitment is a milestone,” Marlon Vargas, president of the Confederation of Indigenous Nationalities of the Ecuadorian Amazon, told Reuters. “The banks should finance other forms of economic development, but not oil extraction.”

The August report had named the three banks alongside France’s Natixis, Switzerland’s UBS and Dutch bank Rabobank as the main backers of the shipment of about $10 billion of Ecuadorean oil to the United States over the past decade.

Campaigners had accused the banks of using double standards for making climate change pledges while backing trade in oil from Ecuador, where the industry plans to drill hundreds of wells in the Yasuni National Park, a UNESCO World Heritage site.

The Amazon plays a vital role in regulating the Earth’s climate by absorbing carbon dioxide, one of the main greenhouse gases responsible for global warming.

ING said it shared many of the concerns over protecting the Amazon outlined in the report and had decided to review its exposure to oil and gas exports from Ecuador.

“Our research and resulting engagements are ongoing,” the bank said. “In the meantime, we have decided not to engage in any new contracts for the financing of oil and gas trade flows from the Ecuadorian Amazon.”

Credit Suisse said it had decided to phase out financing for oil exports from the Ecuadorean and Peruvian Amazon after completing existing commitments.

“Credit Suisse reviews and updates its sector-specific policies on a regular basis,” the bank said.

BNP Paribas said it had decided in December to exclude oil exports from Ecuador’s Esmeraldas region — home to Ecuador’s export terminal for oil from its Amazon region.

“BNP Paribas is committed to the continuous improvement of its sustainability strategy,” the bank said.

Rabobank said in August it had stopped financing Ecuadorean crude cargoes earlier in 2020.

UBS, for now, has stopped short of committing to end its financing of Ecuadorean crude oil cargoes. The bank said it maintained dialogue with advocacy groups and was committed to the highest environmental and social standards.

“As such we have declined transactions where the origin of oil is verifiably associated with breaches of our standards, such as indigenous peoples’ land rights or UNESCO World Heritage Sites,” the bank said.

Natixis, meanwhile, financed cargoes of 5.5 million barrels of oil from the Ecuadorean Amazon from July to December — more than double the volume it backed in the first half of the year, according to an analysis of U.S. customs data by Stand.earth and Amazon Watch.

Natixis said that it continued to “proactively” screen transactions for potential environmental or social risks, and understood that financing Ecuador’s oil exports could encourage plans by the industry to expand into the Yasuni National Park.

“Given this situation, Natixis has declined to finance any new clients involved in oil exports from Ecuador since mid-2020 and has reduced the number of existing clients it works with in this area,” a Natixis spokesperson said.

With oil output of around 0.5 million barrels per day, or 0.5% of global volumes, according to BP’s statistical review, Ecuador ranks as a mid-sized producer. Much of its oil is used to pay the country’s debts to China.

The move by the banks could complicate the export of crude oil from Ecuador. Oil trading companies that were working with them must find other banks to back their transactions with refineries.

“Any banks involved in this trade will face growing scrutiny, unless Ecuador’s government puts a moratorium on new drilling, and addresses the environmental damage and rights violations caused by existing production,” said Tzeporah Berman, international programmes director at Stand.earth.

“Ecuador is going to need support to get out from under crushing debt, but new drilling in primary forests without consent from indigenous peoples is not the solution,” she said.

Ecuador’s oil industry says taking care of the environment and maintaining a harmonious relationship with people living in its operational areas is a priority. Petroecuador, the state-owned oil company, did not respond to a request for comment.

While the value of crude cargoes from the Amazon runs into the billions of dollars annually, some investors say the reputational risks of financing such trades — from which major banks derive only a fraction of their earnings — are rising.

“Where investors see a mismatch between banks’ sustainability commitments and actions on the ground, investors will take steps to encourage change,” said Bruce Duguid, head of stewardship at the governance advisory arm of British asset manager Federated Hermes.

(Reporting by Matthew Green and Simon Jessop in LONDON and Brenna Hughes Neghaiwi in ZURICH; additional reporting by Alexandra Valencia in QUITO and Dmitry Zhdannikov in LONDON; Editing by Rachel Armstrong and David Gregorio)

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Asian shares rise as U.S. stimulus plans offset virus woes

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Asian shares rise as U.S. stimulus plans offset virus woes 2

By Swati Pandey

SYDNEY (Reuters) – Asian shares rose on Monday as concerns over rising COVID-19 cases and delays in vaccine supplies were eclipsed by expectations of a $1.9 trillion fiscal stimulus plan to help revive the U.S. economy.

Global equity markets have scaled record highs in recent days on bets COVID vaccines will start to reduce the inflection rates worldwide and on a stronger U.S. economic recovery under President Joe Biden.

Still, investors are also wary about towering valuations amid questions over the efficiency of the vaccines in curbing the pandemic and as U.S.lawmakers continue to debate a coronavirus aid package.

MSCI’s broadest index of Asia-Pacific shares outside Japan rose slightly to 721.96 and just a short distance away from last week’s record high of 727.31.

The benchmark is up 8.5% so far in January, on track for its fourth straight monthly rise.

Japan’s Nikkei rebounded from falls in early trading to be up 0.36%.

Australian shares were slightly higher too after the country’s drug regulator approved the Pfizer/BioNTech COVID-19 vaccine with authorities saying a phased rollout will begin late next month.

Chinese shares rose, with the blue-chip CSI300 index up 0.6%.

“The spotlight will be on Washington DC this week,” said Stephen Innes, Chief Global Markets Strategist at Axi.

The Biden administration tried to head off Republican concerns that their $1.9 trillion pandemic relief proposal was too expensive with lawmakers from both parties saying they had agreed that getting the COVID-19 vaccine to Americans should be a priority.

Financial markets have been eyeing a massive U.S. economic stimulus though disagreements have meant months of indecision in a country suffering more than 175,000 COVID-19 cases a day with millions out of work.

“Vaccine breakthroughs make it likely that life will become more functional again at some point in 2021, resulting in higher GDP growth and more robust corporate earnings,” Innes said.

“But increasing global COVID19 infections, new variants of the virus, tightening social distancing restrictions and delays in vaccine rollouts in some places, all increase the near-term growth risks.”

Global COVID-19 cases are inching towards 100 million with more than 2 million dead.

Hong Kong locked down an area of the Kowloon peninsula on Saturday, the first such measure the city has taken since the pandemic began.

Reports the new UK COVID variant was not only highly infectious but perhaps more deadly than the original strain also added to worries.

In the European Union, political leaders expressed widespread dismay over a hold-up by AstraZeneca and Pfizer Inc in delivering promised doses, with Italy’s prime minister lashing out at the vaccine suppliers, saying delays amounted to a serious breach of contractual obligations.

On Friday, the Dow fell 0.57%, the S&P 500 lost 0.30% and the Nasdaq added 0.09%. The three main U.S. indexes closed higher for the week, with the Nasdaq up over 4%.

Jefferies analysts said U.S. stock markets looked overvalued though they still remained bullish.

“For the stock market to have a real nasty unwind, rather than just a bull market correction, there needs to be a catalyst,” analyst Christopher Wood said.

“That means either an economic downturn or a material tightening in Fed policy,” Wood said, adding neither was likely to occur in a hurry.

In currencies, major pairs were trapped in a tight range as markets awaited a U.S. Federal Reserve meeting on Wednesday.

The dollar index was flat at 90.19, with the euro at $1.2169, while sterling was last trading at $1.3691.

The Japanese yen was unchanged at 103.77 per dollar.

In commodities, oil prices fell with Brent down 12 cents at $55.29 a barrel and U.S. crude off 3 cents at $52.24.

Gold was higher with spot prices up 0.2% at 1,855.9 an ounce.

(Editing by Sam Holmes & Shri Navaratnam)

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Oil prices edge lower as COVID-19 lockdown concerns overshadow demand prospects

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Oil prices edge lower as COVID-19 lockdown concerns overshadow demand prospects 3

By Florence Tan

SINGAPORE (Reuters) – Oil prices slipped for a second straight session on Monday as renewed COVID-19 lockdowns raised fresh concerns about global fuel demand.

Brent crude futures for March fell 8 cents, or 0.1%, to $55.38 a barrel by 0717 GMT, while U.S. West Texas Intermediate crude for March was at $52.26 a barrel, down 1 cent.

“Signs of weaker demand weighed on the market,” ANZ analysts said, pointing to lockdowns in Hong Kong, China and possibly France as COVID-19 cases rise, restricting business activity and fuel consumption.

China reported a climb in new COVID-19 cases on Monday, casting a pall over demand prospects in the world’s largest energy consumer, the main pillar of strength for global oil consumption.

Last Friday prices came under further pressure after data from the U.S. Energy Information Administration showed U.S. crude inventories surprisingly rose by 4.4 million barrels in the week to Jan. 15, versus expectations for a draw of 1.2 million barrels. [EIA/S]

The number of oil and natural gas rigs added by U.S. energy firms rose for a ninth week in a row in the week to Jan. 22, but are still 52% below this time last year, data from Baker Hughes showed.

The rig count is expected to rebound further in the weeks ahead as producers maximise output ahead of spring, according to Stephen Schork, editor of oil market newsletter editor The Schork Report.

Some support for prices has come in recent weeks from additional production cuts from the world’s top exporter, Saudi Arabia. But investors are watching for a resumption of talks between the United States and Iran on a nuclear accord – which could see Washington lifting sanctions on Tehran’s oil exports, boosting supply.

Iran’s oil minister said on Friday the country’s oil exports have climbed in recent months and its sales of petroleum products to foreign buyers reached record highs despite U.S. sanctions.

On Sunday, Indonesia said its coast guard had seized the Iranian-flagged MT Horse and the Panamanian-flagged MT Freya vessels over suspected illegal fuel transfers off the country’s waters.

(Reporting by Florence Tan; Editing by Kenneth Maxwell)

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