Your Franchising questions are hopefully all answered here just click on the question to find the answer.

A definition of Franchising

Franchising (from the French for honesty or freedom) is a method of doing business wherein a franchisor licenses trademarks and tried and proven methods of doing business to a franchisee in exchange for a recurring payment, and usually a percentage piece of gross sales or gross profits as well as the annual fees. Various tangibles and intangibles such as national or international advertising, training, and other support services are commonly made available by the franchisor, and may indeed be required by the franchisor, which generally requires audited books, and may subject the franchisee or the outlet to periodic and surprise spot checks. Failure of such tests typically involve non-renewal or cancellation of franchise rights.

A business operated under a franchise arrangement is often called a chain store, franchise outlet, or simply franchise

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What is the difference between a franchise business and a business package?

Some companies offer the budding entrepreneur the opportunity to start up in business by supplying them with the necessary equipment, knowledge and training to do so within a business package.

To give you one example of a business package some one who wishes to start a business manufacturing garden ornaments can obtain a package that will give them a quantity of moulds, tools that they will require, materials and a days training in how to use them. This is a Business package and is not a Franchise.

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Franchise Advice, Questions To Ask The Franchisor

Some basic advice when looking to purchase a franchise is to check out on the franchisors previous track record with his existing franchisees. Phone around their existing franchisees and ask for their honest opinion on the following questions to help you build up a good picture of the Franchisor. This is very important as there are franchisors out there who are very unhelpful towards franchisees within their network and I believe that this is a must for any prospective franchisee to under take.

  • How forth coming with information was the franchisor when enquiring initially about the business?

  • Do you think in hindsight the franchisor was more interested in signing you up than whether you were suitable for the business?

  • Did the franchisor deliver what he/she promised?

  • Was the training the franchisor provided adequate for your business needs?

  • Does the franchisor offer extra training if required at their sole expense?

  • Does the franchisor make site trips if required?

  • How helpful was the franchisor in the early days in helping you set up your business?

  • How easy is the franchisor to get hold of?

  • How long does the franchisor take to get back to your phone calls/emails?

  • Does the franchisor have a willingness to help you out if required?

  • Does the franchisor still maintain good personal contact with you and the other franchisees in the network on a regular basis?


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Franchise information That prospective Franchisees Ought To Consider

Before travelling miles to an initial meeting to discuss a business opportunity with a franchisor it is useful for the prospective franchisee to consider the following important points first.

  • How serious are you about this franchise opportunity?

  • Do you match up to the franchisors franchisee job description/profile?

  • Have you looked into other similar franchise opportunities to build up more of a picture of this particular type of franchise?

  • Research this type of business to gain more of an understanding about it?

  • Check out the area where you would wish to run your business to find out what competition already exists?

  • Have you got any experience that may be of benefit to you within this field of business?

  • Are you really cut out for this type of business?

  • How adaptable are you to learning?

  • Could you adapt your present lifestyle to run your franchise business properly?

  • Would your family if applicable support you in your business venture?

  • Would you have the self motivation to succeed with your new franchise business?

  • Can you afford the franchise in the first place and if not how would you raise the capital to finance it?

  • Could you survive for the first few months financially whilst the business got itself established?

All these questions can be answered through doing a little research and I would strongly recommend doing so before arranging an initial meeting with the franchise business owner. You may unfortunately find out that the particular franchise that you were interested in would not be suitable for you.

This would save yourself valuable time in not having to travel potentially miles to meet up with the franchisor only to be turned down due to unsuitability.


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Franchise Intellectual Property, What is it?

The licensed use of the Franchisors intellectual property is part of all franchise systems. Intellectual property covers know how of the operational side of the franchisors business, any IT involved within the business, the accounts and admin side of the business and the use of any trademarks and trade names belonging to the Franchisors business.

The franchisor retains ownership of the intellectual property always and as the network of franchises grows, the value of the intellectual property and brand grows accordingly with it.

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Pilot Franchise

For any business person that is hoping to franchise his or her business model it is very important for them to run at least one pilot scheme in a different region of the country to where their existing business is already operating to ascertain that their business model will work successfully in different regions of the country.

The results gained through running the pilot scheme or schemes will help them to truly evaluate whether their business model is a franchisable proposition!

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Franchise Marketing Levy, What is it and what is it for?

It is a common practise within franchising for franchisors to charge their franchisees a standard ongoing fee as a contribution towards or in some cases to finance entirely some form of central advertising or marketing fund appropriate to the needs and idiosyncrasies of that particular franchise business.

Usually a franchisor will keep this fund separate and will produce yearly accounts to show where this money is getting used and at any time all of his franchisees as a right to ask to view these figures. The fund is not for the franchisor merely for the franchise businesses ongoing marketing.

Franchisees although in most franchise businesses are made aware that most if nor all local advertising and marketing is still down to them, the marketing levy is more for national advertising, marketing and brand building

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Business format franchises What are they?

Business format franchises usually will fall into one of these two categories

A franchise job (Is where the franchisee will actually do the work themselves providing the service hands on to their customers)

Management franchise (Is where the franchisee is mainly delegating others to do the work for them)

It is very important to recognise the difference between these two categories as it will help you to locate and find a franchise that will suit you and the skills that you possess.


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Franchisor Evaluation Of Potential Franchisee

It is very important for a Franchisor to compile a record of the prospective Franchisee during the time that they are interviewing them. The Franchisor will need to be certain that the prospective Franchisee as all or at the very least most of the attributes that the Franchise business requires so as to enable them to become a success if they are offered the franchise. This is just as important for the potential Franchise to know, because if they are looking at potentially investing a substantial amount of their own capital into buying this franchise they will need to know whether they would be suitable or not. The last thing that any prospective Franchisee needs is to be sold a business that they are totally unsuitable for!

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Work From Home some of the Benefits

I feel that I am amongst the lucky small category of people who run their own business and work from home. Some of the personal benefits of working from home in my eyes are as follows:-

Not having to rush around in the morning to get out the house in time to clock in!

Within reason work when I want to and not when I am told to!

Seeing my family grow up and even more so me been a bigger part of their life's.

I have time to help out and do other things around the house.

My overheads are a lot lower than working from an outside office and having rent and business rates to find on a monthly basis.

To be honest working from home does not feel like an ordinary job, more like an hobby I would say, apart from obviously the business must be kept on top of!

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