| What is a Franchise?
Oxford English Dictionary Definition:
Nouns:
1. An authorization granted by a government or company to an individual or group enabling them to carry
out specified commercial activities.
2. A business or service granted such a franchise.
3. The right to vote in public elections.
4. Authorization given by a professional league to own a sports team (N. America)
Verbs:
1. Grant a franchise to
2. Grant a franchise for (goods or a service)
DERIVATIVES franchisee noun franchiser (also franchisor) noun.
ORIGIN originally denoting a grant of legal immunity: from Old French, from franc ‘free’.
As the definition suggests, the term franchising covers various types of agreements but is now most commonly
used to describe business format franchising. Business format franchising is the granting of a license
by a company or person (the franchisor) to another (the franchisee), enabling them to carry out commercial
activities using the name and trademark of the franchisor. Each business franchise is owned and run by the franchisee:
the franchisor retains overall control, including marketing of products and services as well as monitoring
customer service and quality.
The franchisor charges the franchisee an initial fee, as well as management service fees, which are
normally calculated as an agreed percentage of annual turnover or profit. There may also be requirement
for the franchisee to support the company in areas such as training or promotion.
At a time when many professionals in the finance industry and other sectors
face redundancy as a result of the credit crunch and recession starting up your
won business can be an alternative to finding alternative employment and
investing a franchise business offers a way into an established business
model.
Working with a good franchisor can offer a number of benefits and reduce the risks involved in running
a business. For example:
• Marketing campaigns may be in operation with ongoing advertising to enhance the brand further.
• You can save capital as money that you would invest in marketing if you were trading independently
can be invested in development instead.
• You may benefit from an operational supply chain and enjoy bulk discounts if arrangements have
been made.
• A good franchiser will share their experience through training and education on all aspects of
running and developing the business.
• You don’t have to come up with the business idea; it’s been tried and tested which
gives certain confidence.
• Consumers may also take confidence in the fact that you are part of a large operation. Depending
on the product or service this can be a powerful ally.
Tips:
• Before signing any business franchise agreement always consult a solicitor
• If in doubt, seek advice
• Do your research! Ensure that any business franchise agreement suits you 100%. You will be tied into it for a period
of time (often 3 - 5 years) so it’s essential that it is perfect for you.
• If you are an entrepreneur and really want to run your own business then there
may be better alternatives. As a franchisee you will have to answer to someone
and if that doesn’t appeal then visit the Money Jungle
Business Start
Up section or look at businesses
for sale
Interested?
For a list of UK and international franchise opportunities, professional and legal advisors please visit the
Money Jungle business directory.
Business link provides a help line dedicated to buying and running a franchise:
Tel +44 (0)845 600 9006 or visit www.businesslink.gov.uk
for more information
For more general information on franchises visit http://en.wikipedia.org/wiki/Franchising
The Money Jungle team checks each moneyjungle.net business directory
franchise listing to ensure that they are legitimate business opportunities.
We strongly advise researching every opportunity that you find here or elsewhere and if you have any doubts
then always seek advice. If you have any knowledge to the contrary then please contact
us
Next Page
|
