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Franchising - the basics to understand
by Startacus Admin
What if you fancy the world of self employment, but don’t actually have a business idea or model that is particularly unique? Considered Franchising?
But what is Franchising and what does it entail? How much does it cost? What are the benefits and what can be the disadvantages...and where can you go to get yourself one? Thankfully here’s our Graham, sorry Startacus with a quick reminder...
What is Franchising and what does it entail?
It’s kind of like a marriage, there are usually two parties, the franchisor and the franchisee and a contract is drawn up that ties the two parties together. However, unlike most marriages, a fee is paid to the franchisor from the franchisee for the rights to the brand, the marketing, the name and the business model that is already established and exists. Franchises transgress across most business sectors, from white collar businesses, to retail, the service sector and part time home businesses.
How much does Franchising cost?
It can vary on a case per case basis. Work from home franchises can be a lot cheaper than perhaps a food or retail franchise. In the UK, you should expect to pay circa £25k+ on average to buy into a Franchise, however do remember that you will also need to take into account additional costs for legals, equipment, stock etc on top of that initial franchise fee. Some Franchising fees may be much higher and you often pay top whack to buy into some of the big brands and businesses that offer a franchising route into the business.
What are the benefits?
You just might not have that killer idea, but have all the other traits needed to be a successful self employed person. Franchising allows you to take a safer route into starting your own business; you are in effect benefiting from the security of having an already established brand, business model and a system that works.
Disadvantages? Well, if you really are keen on starting your own business then franchising can be a safe route into self employment. However are you really interested in self employment because you want your career to be safe? That in a sense can be a disadvantage and deterrent to some people who may be put off by the security that a franchise could offer. Others may feel that their creativity and control could be stifled and that by having an existing business model and brand, there aren’t too many big questions left to answer. You are in effect bound by the terms and the overall contract that you agree which may scare some people off. Also, if you are part of a big franchise and it all goes badly wrong in another part of the business, your business may suffer as a result.
Where can you go to get yourself a Franchise? The internet is full of spaces, places and brands that you can buy into. If you are based in the UK and would like more official guidance on the legalities and business practicals,then The British Franchise Association is a good place to start, as is Which Franchise, which in itself is a partner site to The BFA. Franchises currently for sale can be found in sites such as Franchise Direct , Franchise Sales and Select Your Franchise. If you are based in Ireland then perhaps the Irish Franchise Association would be a good starting point.
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