What is a Franchise?

For some people, the idea of starting a business completely from scratch can be pretty intimidating. That’s why the idea of becoming part of a franchise can be an exciting way to move forwards.
But what is franchising, and how does it work? Well, in this guide we will run through exactly what a franchise is and give you all the facts you’ll need to decide whether starting a franchise could be the best option for you.
In terms of turnover and employment, the franchise sector is booming and seeing all-time highs. It also contributed approximately £15.1 billion to the UK economy and put around 621,000 in employment according to BFA.
A franchise is a partnership between two parties: a franchisor and a franchisee. A franchisor is a person or a group of people who own a company; a franchisee is a person who wants to open a franchise business using that company’s name.
The relationship between these parties will be agreed upon in a contract that will outline the roles and responsibilities. The franchisee will often have to pay a fee to get started, and as a result, will receive the following:
Across the UK there are franchises in a number of sectors, so there’s bound to be one that suits what you’re looking for. Some of the UK’s most popular franchises are:
That’s just to name a few. There are many others out there from cleaning companies to retail outlets and more. A quick search online will show you exactly what franchise opportunities there might be in your sector.
If you want to start a franchise, there are a number of ways you can go about raising the finance you’ll need. First of all, you’ll need to make sure you’ll need to be 100% clear on how much you’ll need.
Here are some ways of getting finance to get your franchise started:
For more options around raising finance, take a look at our dedicated guide here.
As we’ve already pointed out, there are countless franchises out there, so it’s important that you follow the right steps to make sure you’re picking the right one for you.
This means you should make sure you’re thoroughly researching the options you have available before committing to a contract.
Here are some key things you should consider when picking a franchise:
Franchising comes with many pros:
Like all business models, franchising also brings with it some potential cons. These can include:
So there you have it, our summary on what franchises are, what they involve and how you can get started. This might be the wrong or right route for you, but whatever you decide it’s important that you think things through thoroughly to ensure you’re making the right decision for your business.
To view the franchise businesses currently available for sale, take a look here.
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