Buying a Franchise

1. The Advantages

1.1

1.2 A franchise is usually based on a proven business idea. You are basically copying a product or service which the franchisor has already shown can work (but see 3).

• It is easy to check with existing franchisees whether the business really works.
• A good franchisor will continuously research and update the business idea.

1.3 You may be able to use a recognised brand name.

• You will benefit from any national advertising or promotion undertaken by the franchisor. This is often funded by additional management fees.
• You will also be able to use any trademarks the franchisor owns.

1.4 A good franchise operation will give you full support. Typically, this includes:

• Introductory training, usually covering general skills (eg bookkeeping), as well as training for that particular business.
• Help in setting up the business such as finding suitable premises.
• A detailed operations manual which tells you how to run the business.
• Ongoing support and advice.

1.5 You will almost always be given exclusive rights to the franchise in a specified region or to an exclusive client base.

• There will still be competition from other related businesses.

1.6 Financing the business is likely to be more straightforward. It can be easier to borrow money to invest in a franchise with a good reputation than to find backing for an unproven start-up.

• Some franchisors have relationships with banks and can help you borrow money, and local enterprise initiatives may supply start-up finance.