Franchising

Franchising

It's an excellent way (alternative) of starting a business

You contract to run it on behalf of the named company

You still have considerable independence

You will be rewarded according to your success

If you obtain a franchise you are working for the owner as well as yourself

Many customers of a franchise business such as Kentucky Fried Chicken, Budget Cars and Holiday Inns, have no knowledge of their ownership.

In each case a franchise is granted by the owner and is controlled by a contract which says how the franchise should be run.

The arrangements are good for the owner of the franchise as he can set up a network of businesses from which income is drawn using other people's capital.

The better franchises seem to offer a means of going into self-employment with a considerable chance of success. You would be running a business based on an established procedure and selling goods or offering services which are already well-known to the public.

Running a well-organised franchise is like managing a branch of a large organisation except that there is a very strong personal involvement and the final profit belongs to the person who has taken out the local franchise.

A franchise offering some kind of manual service to the public might require only an initial setting-up capital of 10 to 15.000 pounds, but a fast food business would need very much more -  50pounds to 100.000 pounds.

A good franchise is that you and your staff would receive complete training in running the business. This would be followed by continious supervision to maintain standards and solve problems.  At the same time the owners would be watching to se that you were honouring the contract and paying royalties.

Great care should be taken before investing a large sum in a franchise which has not existed, successfully, for a long time. You could be involved in establishing someone else's business with your capital