Business format franchising is the granting of a license by one person (the franchisor) to another (the franchisee), which entitles the franchisee to own and operate their own business under the brand, systems and proven business model of the franchisor. Some of the best-known brands in the food industry are based on franchise models such as McDonalds and Pizza Hut Delivery.
A franchisee usually receives initial training and ongoing support from the franchisor in an agreed programme of training. This training comprises all the elements necessary to establish a previously untrained person in the business.
The franchise agreement, between the two parties, sets o ut the obligations and rights of both franchisor and franchisee, and determines how long the franchise arrangement will last (including renewal options).
The principle is simple - rather than developing company-owned outlets, some businesses instead expand by granting a franchise to others to sell their product or service under the Franchisor’s existing brand.
There are clear advantages to both franchisors and franchisees, just some of which are:
Good franchise businesses will offer comprehensive training programmes in sales and, indeed, all business skills and can also help secure funding for your investment as well as, for example, discounted bulk-purchases for outlets when you are in operation.
If customers are aware that you are running a franchise business, they will understand that you offer the best possible value for money and a consistent quality of service - although you run your 'own show', you are part of a much larger organisation.
You grow the business and, when you are ready to move on, can sell it for a profit.
We advise and act for both franchisors and franchisees. If you are a business owner who wants to expand and is considering a franchise model or an individual looking for an opportunity to set up a new business whilst limiting the risks associated with a new startup venture we can help.
We can help you with any of the following: