What is Franchising?

You’ve decided you want more control of your future. More flexibility and more control over your own earnings. Running your own business could be the answer.

Setting up your own business in today’s economic climate could be a risky decision, but choosing an established franchise offers a safer alternative. It gives you the freedom and rewards of being your own boss yet the support of an established business with a proven business model and a known brand.

A franchise is a legal and commercial agreement between two parties which gives the franchisee the rights to market a product or service using the trademark/trade name of the franchisor. The franchisee owns and operates the business, but the franchisor controls the operating methods, the brand name and the way in which products and services are marketed and sold.

Advantages:

• Proven business model - the business is established and you know it works.
• Trade name - customers are familiar with your product or service.
• Training and support - you will be trained in set up and running.
• Finance - banks are more likely to lend you funding if you have a proven business model.

Disadvantages:

• Limited scope for innovation - franchisor will control many aspects of your business.
• Restrictions on sale of business - you will not be able to sell without franchisor approval and there will be conditions of sale according to your contract.
• Restrictions on business activity - you normally are not able to be involved in activities outside your business agreement.