What is a franchise?
When you are buying a franchise, you are buying the right to run a smaller, similar, version of an established business model from the franchisor. As a franchisee, you will own, run and operate the company, but will follow an existing blueprint. Essentially, you are operating your own business under the guise of a larger corporation, the Franchisor.
What are the advantages and disadvantages of owning a franchise?
- Working business model
- Reputation of a big brand name
- Ongoing help and support
- Defined exclusive territory
- Greater access to finance as increased security due to backing of a proven business model
- High initial start-up fee and ongoing fees
- Usually a fixed term agreement
- Lead generation not always included
- May have stringent KPIs set and potential to revoke agreement if these are not met
- You will not have full control over the business as the franchisor will retain some decision making capabilities
Considerations when starting a franchise
- Likely to have lots of supporting material prepared already – make sure you ask for this
- Ask to speak to existing franchisees to hear about their experiences
- There is often an upfront cost associated with purchasing a franchise which can be quite large. Find this out as early as possible. Will you need funding?
- Seek independent legal advice in relation to the contract
- With many franchises you will be assigned a particular geographical area. Conduct your own research into the area, especially the demographics of the area and any local competitors.
What franchises have X-Forces supported?
Here are a few of the #XFSuccess franchises we have launched:
- Jackson fire and security
- Tubz sweets
- Oven Clean Ltd
- Magic Maths
- Minuteman Press
- Chips Away car body repairs
- Puddleducks Swimming Classes
- Oscars Pet Food
- Smart PA
For more information on running a franchise, check out: www.thebfa.org