Feb 20, 2012
The franchise is an agreement in which a successful business gives an individual or a group of individuals the right to commercialize the company’s products or services within a given location in exchange for a fee. People generally associate franchising with companies from the fast-food industry. However, there are approximately 120 types of franchises in a variety of fields, ranging from financial services to health and fitness and so on.
photo credit: ceiling
How Does It Work?
The individual or group of individuals who purchases the franchise is known as franchisee. The company that sells the franchise is known as the franchisor. The franchisor sets guidelines and rules that must be followed. Once you sign the agreement, you become a part of the company’s success by incorporating in your business its brand, operating methods and other standards. In exchange, you are required to pay a franchise entry-fee and a royalty fee.
Benefits of Having a Franchise Business
Franchising has become a popular way of starting a business. The benefits are:
- The brand’s image. Nowadays, people tend to buy products or services from popular brands because they are associated with high standards and great customer support services.
- Excellent training and support. In order to maintain the franchisor’s standards, you will benefit from training courses and support from the company on how to start and manage your business.
- Future savings. Your business relies on a successful working model. Moreover, you do not have to invest in a strong advertising campaign since the franchisor is nationally renowned.
- Exclusive rights in a given territory. The franchisor will not sell more than a franchise on the same territory.
- More financing options. You will be able to borrow money from the banks more easily when you have a franchise with a great reputation on the market.
Before deciding to start a franchise business, it is important to be well-informed about the company, dedicated to make your business work and also to discuss to a franchise expert before you sign the agreement. If you are looking for business franchise opportunities then do please visit Workingmums.co.uk for more information.