Many of the world’s most recognisable and successful companies operate within a franchise business model, where a ‘franchisor’ grants the use of its trademark and quality system to a ‘franchisee’. Under this agreement, the franchisee is able to trade under the parent company name, whilst receiving ongoing training, marketing and management support from the franchisor. For a fuller explanation, read What Is A Franchise?
Benefits Of Franchising
Starting up an entirely new business can be difficult and costly, whereas when becoming a franchisee you are buying into a tried and tested brand name that already enjoys widespread recognition amongst consumers. You can build up relationships with your fellow franchisees, with whom you can readily exchange invaluable ideas and market intelligence. The buying power a franchisor possesses will also be far superior to that of an independent business and the economies of scale will be passed on to your customers. For a more detailed explanation of the advantages, click here to read Benefits Of Buying A Franchise.
Versus Own Business
Choosing to go it alone and set up your own business represents a huge financial and emotional commitment. You will need to have an immense amount of knowledge about your chosen market sector, if you want your brand to stand out from the competition. In fact, figures show that failure rates tend to be significantly higher for new start-ups, compared with those who invest in a franchise.