If you are interested in investing in a franchise, make sure you know the basics. Here is a quick guide on the 3 key aspects of franchising that all prospective franchisees should know.
How it works
Franchising can be described as working for yourself but not by yourself. By investing in a franchise you are gaining the advantages that supported self-employment brings.
In exchange for an initial franchise fee and ongoing fee, the franchisor will licence you to operate the business under their brand and provide the services for a specific period of time. This period of time is outlined in the franchise agreement. The franchisee also receives the franchisor’s expertise, proven business method and the power of the brand.
As a franchisee you will be operating the business as it is set out in the franchise operations manual which is provided by the franchisor. Most franchises are defined by territories which indicates your trading area.
The role of the franchisor
The franchisor is the person or company that owns the business model. They will provide all of the following in exchange for the initial franchise fee and the ongoing fee:
The franchisor is the head of the business and will provide the franchisee with all that they need to get going. However, do not make the assumption that they will run the business for you. As a franchisee it will be your responsibility to make the business work.
The role of the franchisee
A key component of being a franchisee is being able to follow a system. The business model and processes have all been tried, tested and are proven to work. The role of the franchisee is to follow these processes to replicate the business and make a profit for themselves.
As mentioned, the franchisee will be the driving force behind their franchise. As much as you are supported by your franchisor, you will need the passion and the drive to make the business a success. Your franchisor will not be there to wake you up every morning. It will be down to you to focus the business and use the tools provided to you to become a successful franchisee.
A key benefit of becoming a franchisee is that you will become part of a network of people all working towards a similar goal. You and the rest of the franchisees for the business will be able to share information and support each other as well as having the backing from the franchisor.
You can find out more information about becoming a franchisee in our FREE eBook ‘How To Select Your Franchise’. To download your copy, click here.
If you are ready to start finding the franchise that suits you, why not start by taking our 2-Minute Matching Service.