Business Format Franchising: Where one (the franchisor) grants another (the franchisee) the license to run the
franchisor’s proven business model in another territory.
So how does this work? The franchisee will pay an initial fee for the franchise which includes the training and equipment to set up and run the franchise business. It is important that a franchisee follows the business model closely according to the franchisor’s instructions as this will help increase their chances of success and supports consistency across a network. A franchisee agreement will usually run for about 5 years (this can be longer if the investment is larger) and if a franchisee’s performance is good, they will have the opportunity to renew their agreement for another term.
One of the benefits of franchising for a franchisee is that they will have the opportunity to sell their business should they decide to, and in partnership with the franchisor can agree to sell, therefore benefitting from a return on their investment.
In Business For Yourself – Not By Yourself!
Although success is not always guaranteed, buying a business that has already made mistakes, been through a trial and error process and has a model that is well established and proven as a viable business certainly increases your chances of making it a success, too. You should also get a network of people to help guide you along the way and someone to turn to when you need help, as well as training and help acquiring new skills.
Low Risk On Investment
Franchising is a terrific option for those who have a desire to be their own boss but also have the security of managing a known and established brand. Within franchising, there are hundreds of tried and tested business models from across all industries, with a failure rate of less than five percent over five years, compared with non-franchised small businesses, where failure rates are as high as 91 percent in their first year of trading.
Business Opportunities For Everyone
From accounting to pet care, home-based roles to being on the road in a van every day, there are business models for every aspiring business owner, with franchisors able to suit the needs and commitments of every potential franchisee.
A Community Benefitting From Local Investment
The local community can be rest assured that the business will build on good foundations and their local investor will be supported by the ongoing research and development by the franchise support team. This support means that franchising has the ability to develop at pace and serve customer expectations well providing fabulous additions to local economies.
This video explains in depth how franchising works and provides some wonderful examples of franchise brands that are growing well using the franchising model and features some franchisees that are excelling too!
Hear from some of our franchisee members and franchisor members, about what they love about franchising