If you’re interested in managing a business, but don’t want to undertake the work of developing new products, establishing a brand, or sourcing customers from scratch, there is an option for you out there: franchising. Here’s everything you need to know on the subject!
What is Franchising?
Franchising may well seem complicated at first, but when it comes down to it, franchising is essentially just a form of licensing relationship. When a small business takes off and expands dramatically, the owner may find that they are unable to control every new branch themselves.
One option in this situation would be to employ managers to control every new outlet. However, franchising is an alternative business practice, where the original business owner grants third parties grants and licences to run the smaller outlets themselves. They then run this outlet relatively independently, but under the company’s original branding, marks, and regulations.
What Kind of Businesses Offer Franchises?
Pretty much any business can franchise. If you are looking to take on a franchise outlet, you could take on everything from a fast food outlet to insect control franchise opportunities. However, the most common types of business to franchise tend to be restaurants, hotels, convenience food, care homes, and gyms.
How to Maintain the Franchiser’s Brand
If you do get involved in franchising, you benefit from taking on an outlet that is already recognised by the public. People are likely to have already used other outlets under the same name as yours, and are thus likely to engage with your business without having to be convinced. However, while you are benefiting from the brand, you need to ensure that you maintain the brand. Don’t try to mix things up too much. When people begin to question your assimilation with the brand you represent, the more likely you are to lose custom.
Can You Make Changes to the Status Quo?
While you should stay within the boundaries of existing branding, you can still expand your franchise. Remember that ultimate control over your franchise lies in your hands. Make sure that you read you the contracted terms and conditions between yourself and the franchiser in order to completely understand what you can and can’t do to expand the franchise that you are in control of. You may find that your franchise isn’t legally a franchise, but is merely a licence. In order to legally be a franchise, three terms must be met. The franchisee’s business must be substantially associated with the franchiser’s trademark, the franchisee will have to pay an initial and / or continuing fee for the right to enter and remain in the business, and the franchisor exercises control or provides assistance to the franchisee. Depending on whether your franchise is actually a franchise or not, you may be able to expand, change protocol, or alter modes of operation. If you are unsure as to what to do, be cautious and contact a lawyer, as you don’t want to break any rules. Small mistakes can prove costly in the long run.
As you can see, getting into franchising is a relatively simple route into business management. It will provide you with an independent outlet without the groundwork that comes hand in hand with starting up a business of your own!