Points of Franchising
There are a number of advantages that should be fundamental to a franchise.
- The business know-how of the franchisor is proven by at least one successful pilot operation
- The franchisor's brand name may already be established
- Training in special and general business skills are provided
- Administration and management functions may be provided by the franchisor
- Advertising support is provided for the brand name and business
- Support provided during the start-up of the business which may include assistance with site selection; supply of equipment; assistance from experienced staff during the launch period; and selection and purchase of stock
- Detailed Operations Manual covering most eventualities
- Support and guidance on running the business
- Agreed area of operation to avoid trading overlap within the franchise network
- Rights and obligations clearly defined in a written contract
- Commitment by the franchisor to maximise your development - the franchisor's income through the ongoing fees depends upon the continuing growth and success of all franchise owners.
As in most activities there are a number of disadvantages:
- While you own the business, you can never be entirely your own boss. The franchisor will not permit changes to the business format and will retain the right to intervene or terminate the licence to maintain standards and stimulate progress. You should understand this fundamental point from the beginning if good working relationships are to be created.
- It is not always easy to evaluate a franchise, especially one that is new. A thorough approach and investigation are recommended. Particularly ominous signs are: no proven pilot operation, or goods or services which look dated,
- Franchising, like any small business, may call for long, unsociable hours, with possibly an unacceptable impact on family life. Generally, small business operators put in a fifty hour working week,
- Hidden costs may appear - a thorough check of start-up and running costs should reveal these.
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