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YOUR BUSINESS AS A FRANCHISE

A Franchise is a way to both start and expand an existing business, and covers a wide range of business activities across the globe.

Starting in business? buying a franchise allows you to latch on to an established, proven and profitable business thus almost guaranteeing success. You can still fail due to the lack of certain personal qualities needed to run the business but this risk is much reduced. You have the benefit of a national (or international) brand name, image and reputation.

You get the chance to meet with and discuss the venture with existing franchisees and should consider the commitment carefully before investing in such a venture.

You may have the rights to open more than one branch within your area, or buy rights to a larger area and share revenue from selling smaller franchises within your territory.

Downsides from buying a franchise are many, but you have to weigh them against the advantages;

• you must follow the business plan laid down, there is limited scope to be original and creative.

• you need money to buy the franchise license for your area - a town, country or state.

• you must pay a royalty or percentage of profits from sales to the franchisor.

• advertising and promotion has to be to a standard format which you fund.

Have an established, profitable business? you may be able to sell a franchise for your business idea to expand nationally or even world wide. First you need a tangible track record of growth and profits from one or a few branches before you can franchise the concept to others. 2-5 years is a minimum trading period before you can consider franchising.

To offer a franchise successfully you would normally apply to join a trade association which controls the offering and sale of franchises in your country. Until you are approved and accepted into membership by them there is little chance of successfully selling a franchise business opportunity.

The benefits to you as a franchisor are numerous and include;

• raising money for the sale of each franchise outlet.

• income from each franchisee based on their sales, the more you have and the better each do rules your overall income.

• growth expansion is largely self funding, so a business can grow huge from franchising, think of Pizza Hut and McDonalds.

• franchisees are running their own business, so are more committed and motivated to success and profits.

• whilst you may still own and run your first few outlets your main role evolves to managing the growth of franchised outlets which can potentially be hundred or thousands. McDonald's boasts over 30,000 restaurants, 70 percent of which are franchises, in 119 countries serving over 50 million customers daily. Subway is fast at McDonald's heels with over 25,500 restaurants in 84 countries

Typical businesses that use franchising to expand include;

• fast food outlets

• hotels

• pubs

• restaurants

• office supplies

• estate agencies and realtors

• next day delivery services

• auto repair centres

• golf courses and suppliers

• educational services

Useful web sites

Franchise Opportunities - Franchising.com Directory of business and franchise opportunities, information for entrepreneurs looking to buy a franchise, franchise news & research

British Franchise Association The home page of the British Franchise Association - the single regulatory body for franchising in the UK.

Please feel free to Contact Us with questions or to give us information to add to our knowledge base.