Have you ever wanted to take control of your own career and start your own business but unsure of how to proceed? Maybe you don’t feel you possess the right tools or qualifications to start a successful business and could benefit from the right guidance.
Franchising is a business opportunity allowing you to feel supported every step of the way. In fact, it is a business model where one party, known as the franchisor, grants another independent party, known as the franchisee, the right to operate a business using the franchisor’s brand, business model, products, and services. In essence, it’s a method of expanding a business without the franchisor needing to manage and operate each individual location themselves. Did you know? Franchises exist all over the UK in a range of sectors and industries.You may recognise popular high street names such as McDonalds, Costa, Starbucks and Pizza Hut, even Co-Op.
How does franchising work?
There are simple steps to follow when starting a franchise. Here is a compiled list to help you navigate the world of franchising and make the right choice to start your own business.
- Franchisor: The franchisor is someone who has developed a successful business concept, brand, and operating model. They have a proven track record and want to expand their business to new locations or markets.
- Franchisee: The franchisee is an individual, partnership or company who buys the rights to operate a business using the franchisor’s brand, business model, training and support. They typically pay an initial franchise fee and ongoing royalties or fees to the franchisor.
- Franchise Agreement: This is the legal contract between the franchisor and the franchisee. It outlines the terms and conditions of the franchise relationship, including details about fees, responsibilities, operational guidelines, training, support, and more.
- Initial Investment: The franchisee usually pays an initial franchise fee, which grants them the right to use the franchisor’s brand and business model. Additionally, they need to cover the costs of setting up in their chosen business location, purchasing equipment, and hiring staff.
- Ongoing Fees: Franchisees often pay ongoing royalties or fees to the franchisor, typically based on a percentage of their revenue. In exchange, franchisees receive ongoing support, branding, marketing, and access to the franchisor’s established systems.
- Support and Training: Franchisors provide training and ongoing support to help franchisees operate their businesses successfully. This can include initial training, operational guidance, marketing assistance, and more.
- Consistency: One of the key benefits of franchising is maintaining consistency across different locations. Customers can expect the same quality of products and services regardless of the franchise location they visit.
- Expansion: Franchising allows the franchisor to expand their brand and business presence quickly, often into areas they might not have been able to reach on their own. It also allows franchisees to grow their business into other territories, by investing in more areas within the franchise – over 33% of franchisees[1] own multiple units or multiple brands.
What franchising opportunities exist?
Franchising exists in almost every sector you can think of, including fast food, retail, hospitality, fitness, education, accountancy and more. As an industry, franchising is worth over £17billion to the UK economy[2].
Whilst it offers numerous advantages such as reduced risk for franchisees due to the established brand and business model, there are other challenges to consider, such as the loss of full operational control and the potential for conflicts between franchisors and franchisees.
This is why it’s essential for you to thoroughly research what opportunities are out there for you, carry out due diligence to make sure you’re happy with the brand you’re looking to invest in, and seek guidance to fully understand the terms of the franchise agreement before entering into any kind of business arrangement.
What advantages are there to franchising?
Franchising offers a supportive environment where you, as a potential investor or franchisee, will not feel the pressure of setting-up a business by yourself. You can follow a proven business model, and gain advice from your franchisor on what steps and processes to follow.
The franchise world is full of advice and budding entrepreneurs, like yourself, who are eager to support your journey. Any questions you have regarding loans, legalities, business premises and operations will be provided by franchising specialists, who can help make informed decisions, and guide you in your franchise journey.
You can choose to be as involved in the business as you want: hands-on, less involved in the day-to-day but focused on growth strategy, or anything in between. If you have the creative ambition then follow your passion! Don’t let your anxieties or ‘what if’s’ hold you back!
If you’re looking for more advice on whether franchising is the right path for you, please contact us. We’ll connect you with an EWiF mentor, who will offer personal insight, so you gain a richer understanding about how to fulfil your dream through franchising.
[1] 2018 bfa NatWest Franchise Landscape report
[2] 2018 bfa NatWest Franchise Landscape report