Buying a Franchise

1. The Advantages

1.1 A franchise is usually based on a proven business idea.

You are basically copying a viable product, service or business (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.

1.2 You may be able to exploit a recognised brand name. It can be easier to sell to customers who are familiar with the name.

• You will also be able to use any trade marks the franchisor owns.

1.3 3 A good franchise operation will give you full support. Typically, this includes:

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

1.4 You usually have exclusive rights in your territory. 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 businesses.

1.5 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.