What is a franchise?
Why not consider a franchise? It's one of the safest ways to start a business.
If you are thinking about starting a business why not consider a franchise? Franchising is growing fast. It’s proven to be the safest way of starting your own business and nine out of ten franchisees – the people who run franchised businesses – say they are in profit.
Franchising is not limited to burger bars – there are hundreds of businesses that are franchised in the UK, from plumbing through retailing to will-writing services. Whatever kind of business you want the chances are there’s one to suit you.
The industry is growing too, although not as fast as many franchisors would like, 39% say a lack of suitable franchisees is thwarting growth – so they are looking for you. Two-thirds of those who go into franchising were in salaried employment immediately before taking out their current franchise.
Training is provided by 100% of franchisors, with 73% providing in-house training. Encouragingly, the realtionship between franchisors and franchisees is very good, with the majority (86%) saying that their dealing with one the other was healthy.
But before you start looking for a franchise it pays to do your homework:
- Find out about the concept
- Check whether franchising would suit you – running a franchise is not everyone’s cup of tea
- Check what you can afford – you have to pay for franchises so if you want to start a business on a shoestring you may have to forget franchising
- Check what kind of franchises are available – there is a huge range so there may well be one to suit your own interests and needs. Check out our franchise guides for in-depth looks at different sectors.
- Pick the right one for you – running a franchised business can often be hard work so you have to be fully committed to it or it risks becoming drudgery
- Know where to find out about franchising and get expert help
- Talk to several people who already have franchised businesses to find out what it’s like at the sharp end.
Contact the franchisors that you are interested in. We have details on all the major franchisors and many of the smaller ones in our franchise directory
What is franchising?
It’s a way of setting up in business for yourself but not on your own. With a franchise you run the business, but using methods that have been already tried and tested by another company, called the franchisor.
You pay the franchisor for a package that gives you an exclusive ‘territory’ and allows you to use its brand name, methods of operation, technology or products for a certain period, say five years, on a renewable contract. Once accepted as franchisee you get technical and/or business training, operation manuals, often marketing help and sometimes accounting or other administration services. In return, you agree to run the business according to the franchisor’s methods and standards.
Make sure you are well briefed about what franchising means in practical terms before you start looking for a franchise. It’s worth investing time and money on research – it could save you far greater sums and a lot of heartache later on.