So you want to be your own boss and run your own business?
But you are unsure where to start, what resources you need, how to market products and services, and how to hire and train employees.
Franchising is an excellent option for people in this situation. But, a franchise is a method by which the business owner, the franchisor, licenses the business to the franchisee.
They have the right to operate the business in an agreed way and style in return for ongoing fees. The Franchise Agreement governs the agreement, and it is essential to remember that in franchising, a person is tied into a partnership arrangement for a defined time. The contract is usually renewable.
Advantages
- The business model already works thus reducing risk to the entrepreneur.
- You are fully trained in all aspects of the business and, in many cases, receive ongoing support.
- The brand is established, people recognise it, and they are more willing to buy from you.
- The franchisor helps find a suitable location to deliver traffic/footfall.
- Marketing tools and advertising campaigns are provided both nationally for the brand and locally for individual branches. Most franchisors help franchisees make a significant local impact with a publicised business launch.
- Centralised purchasing means you get the best possible prices for goods and materials.
Disadvantages
- Start-up costs: costs can vary according to the individual business. However, some franchise startup costs can be prohibitive and put off the entrepreneur. What should be taken into consideration are franchises are less risky than traditional start-ups, so it may be worth paying a premium.
- Lack of control: Franchises have to be run by the franchise agreement. This may become too restrictive for highly ambitious entrepreneurs as they may want to experiment with their business model to accelerate growth.
Conclusion
If you want to start your own business and be your boss but are worried about losing your startup capital, then a franchise may be the perfect solution. If you are highly entrepreneurial and are constantly trying to capitalise on new opportunities, you may find running a franchise too restrictive.
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