About Franchising

Essential Franchising FAQs

Q What is a franchise? Studying a Franchise Agreement

A There are different formats of franchising, but we shall focus on business-format franchising. This is essentially where an organisation has created a working business model and packages the complete business system, from its logos and marketing methodologies to its training and support structure, to be purchased by would-be franchisees, under a licence with various 'rules'. These rules, are to ensure that the franchisee operates their licensed business within the framework required by the franchisor, and also provide protection and strength of direction to the franchisee.

The Franchise Agreement, is the all-important document that discloses the arrangement by which the franchisee and franchisors relationship shall operate, and is therefore something that should be reviewed very carefully when considering purchasing a franchise. Franchise Legal Expert Nina Moran-Watson explains the Franchise Agreement here.

 Key Franchise Facts (source: Natwest/BFA Franchise Survey)
 Annual Turnover of Franchise Industry  £10.3billion
 Number of Franchise models available  759
 Number of franchisee businesses in operation  30,800
 Average Age of Franchisees  40-45
 Average term of a franchisees operation  6.8 years
 Total employed within franchised businesses  364,000
 Number of franchises reporting profitability  92%
 Average amount borrowed from bank in start-up  £40,000
 Percentage of franchisees that are male  79%

  

  

  

  

  

  

  

  

Q What types of Franchise are there?

A Franchising covers every industry sector and business type imaginable.  In fact, it is because franchising is so vast that the Totalfranchise.co.uk group of franchise opportunities websites exist.  We have dissected the franchise industry so that each of our specialist sites can provide more detailed franchise information about certain franchise sectors, rather than struggling to achieve this within just one site.  Visit our specific sites if you are looking for more depth of information, whether about 'white-collar' franchising, van-based and mobile territory businessses, retail and premises based franchise opportunities, or for franchises that are excellent opportunities for women, in particular, to start their own venture in franchising, widely acknowledged as the 'safest' route into starting a business.

UK Map showing Franchise Territories

Q Why does a business opt to franchise?

A Franchising represents a method of expansion that can enable a business to grow much more quickly than through natural expansion through turning profit into investment in new sites. By attracting investors to open up additional sites of the company, the balance of investment is coupled by the personal focus and resource delivered by the investor, the franchisee. A franchisee may operate with much greater drive and motivation than perhaps an employee operating in the same role.

The franchisee will receive the majority of the profit achieved through the local site operation, but the franchisor will also receive income from the operation (in addition to the franchise fee to begin with) and so both parties can really benefit. The biggest incentive for a company to franchise however, is the brand and company value that comes from being a nation-wide or even international brand that has been achieved through franchising against perhaps only becoming a regional sized operation through own reinvestment. As more and more companies realise the benefits of franchising, the biggest barrier to greater growth is the lack of awareness of franchising as a whole, very much a secret industry.

Q Why should you invest in a franchise? Whitecollarfranchise.co.uk - your essential franchise resource

A A franchise system offers a lower risk route into self-employment, and gives you a serious of benefits over conventional self employment. The Natwest/BFA survey of 2006 showed that over 90% of franchised businesses were still in operation after two years compared to only 20% of stand alone ventures, an amazing difference.

Of course, you will often pay more to start in a franchise than a non-franchised venture, but then you are receiving initial training, tools, materials, branding, experience and ongoing support and assistance. In addition, other franchisees of the franchisor and the franchisor themselves are all investing in the success of the brand and this collective determination is invaluable, and is missing when pursuing a personal venture. As a franchise develops, so it improves its training, support, systems and all other resources.

As a result of this, the initial fee will certainly be higher than other franchises, but the franchisee performance should equally be always growing as a result of the improvements too. So there are several factors to weigh-up. Yes, franchises are a route to give you the success that you are seeking, but only if you carefully find the right franchise to partner with. 'Partner' is certainly the correct term too, afterall, a good franchise model requires the franchisor and the franchisee to give and receive to one-another in order for both parties to be successful.

The resources throughout this site are designed to help you in finding the right franchise to suit you, so please read them, and utilise the printable guides, you may find their assistance extremely beneficial throughout your franchise research.

Working together, a franchise 'team' brings huge benefitsQ What are the benefits of franchising to you?

A There is one simple benefit that stands out: You are more likely to achieve your objectives than with a non-franchised venture This could mean a better work & lifestyle balance, more control over how you spend your time, greater flexibility in the type of work that you do and, perhaps most importantly for some, being personally rewarded for your own hard work rather than making good money for somebody else.




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