What is franchising?
Franchising in its essence is a partnership between two entities, the franchisor and the franchisee. A franchisor is the person or a group of people who own a company, the franchisee is a person who wants to open a franchise business by using that company’s name. If the idea of starting a business from scratch is intimidating, then perhaps consider starting a franchise business. This article will highlight what exactly is franchising and why it is getting increasing popular.
What is franchising?
Franchising is a great way to become an owner of a small business. There are three different types of franchises which you can choose from, they vary in terms of your position, your input into the business and the amount of involvement of the franchisor. The three types of franchises are; the business format franchise, product distribution franchise and management franchise. Each franchise operates differently and in this guide you will find the differences between the three.
The prospect of quitting your day job and becoming your own boss can be very appealing and is the most common reason for venturing into franchising. If you are considering taking this step yourself, there are, however, several things you should be aware of right from the start. Although it may not seem that way, the decision to buy a franchise can quickly be regretted, if you don’t realise the challenges and nuances it entails, since underestimating them can have severe future consequences.
The world is slowly changing and 2019 will bring us many new things. All industries have to adapt to the new economic demands and so do franchises. Strategies will have to change to stay on top of trends – both for doing business and finding employment.
Franchising is gaining popularity in the modern society due to its numerous benefits. Essentially, a franchise is a permit offered by a company to authorise you to do a particular commercial activity. For instance, a franchise authorises you to use the products, services and brand name of a specific existing company for commercial purposes. The franchisee gets the franchise from the franchisor. This gives the franchisee an opportunity to sell the franchisor’s goods or services. The franchisor communicates or provides everything to operate a franchise. Opening a franchise is easier than starting your own enterprise. The franchisee enjoys brand equity, marketing and operational support.
If you are thinking about running a franchise and don’t want to start from scratch, you might want to look at buying an existing franchise. Franchising is a great method of owning and operating a small business because it has a proven method of success. Buying a franchise has its benefits, for instance it may even allow you to have an easier, smoother process of getting funding.
The British Franchise Association (BFA) together with HSBC UK have launched another year of Franchise Awards, celebrating the success of franchisees and franchisors. The entries for the 2018 franchise awards are now open and all franchisors and franchisees in the UK are encouraged to get involved, and take part in the prestigious industry event.
You will need to raise finances to fund your franchise business. It might be possible that you have to deal with hefty start-up costs that will cover the initial franchise fee as well as buying and/or renting the premises. You will also have to deal with ongoing costs that you need to cover, especially at the beginning where you will not be making a great amount of money.
If you decide that you are ready to take on the world of franchising and want to invest in a franchise business, then there are certain things you need to consider. These include skills and attributes that make a good franchisee, choosing and buying the type of franchise, as well as actually running the franchise on a daily basis.
The franchising sector has become one of the most prominent in the business industry and is currently at an all-time high. Therefore, there has never been a better time to start a franchise business. The incredible performance of the sector proves that the franchise model has been crafted for success.
Franchising is a very specific business structure that is becoming increasingly popular. It is easiest to think of franchising as a kind of licensing. It allows an individual to run a company of their own, but using another company’s brand name, trademarks and suppliers.