So you have a successful business and are seeking to grow, possibly through franchising, but what are the pros and cons?
A franchise model is a set of documents and support to enable another person to trade as you have done, replicating your business in a different area, under licence using your brand.
Franchising can be a great way to rapidly grow your business, including internationally. Firstly though you need to understand what franchising is and more importantly if franchising is right for your business.
Franchising is a very close and long-term business partnership. You have two parties, the Franchisor and the Franchisee. The Franchisor is the business owner, in other words, you. The Franchisee is the person that invests in your franchise. Many franchise agreements are a min of 5 years. You will need to help the Franchisee at every stage of the business. This will include setting up the business, launch and ongoing training and support. Many franchisees have never had a business before so you will need to go right back to basics and help that at every stage.
Franchising can be a great way to grow a business quickly. Raising capital through recruiting franchisee’s can enable you to fund growth organically, quickly and with much less risk. Franchising is also a great way to avoid managing a lot of staff and potential liabilities that can come from that.
That said, it comes at a price. Once you have franchised your business you will need to support your franchisees and you have legal obligations to do so. The relationship dynamic between a Franchisor and Franchisee is completely different from that of the employer and employee relationship. A Franchisee is a business partner, not a member of staff. They work remotely, potentially even internationally so you will lose some control, so recruiting the right people is vital to your franchise being a success.
Is your business ready to franchise?
The Quality Franchise Association ( QFA ), a not for profit trade association has created a free Franchising Your Business course. To take the free course, learn more about franchising and if it’s right for your business visit https://franchise- training.org.uk/course/franchising-your-business/
If after you take the course you are interested in franchising your business seek professional advice. QFA Partner members include franchise consultants, lawyers and other services to help you franchise your business successfully.
Find out more about our partnership with the Forum of Private Business and how the Quality Franchise Association can help you and your business.
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About the author Joel Bissitt
CEO, Quality Franchise Association www.linkedin.com/in/joel-bissitt-vfp-96280311/
Joel has been an entrepreneur since the age of 19. 31 years later Joel has run businesses across many sectors & has 20 years of franchising experience. He is also the Founder & MD of Franchise UK, a leading franchise advertising website.