Most people don’t realise the brand name shop they are walking into is actually a franchise. It’s become a more popular way of operating a business model in recent years but has actually been around for centuries.
From MacDonald’s burgers and Subway sandwiches to your local opticians or favourite pub chain, many companies use the franchise process to expand their brand at a lower cost than normal. In the process, they provide great opportunities for entrepreneurs who want to run their own business.
The key to a franchise is that you get a licence to use a particular company’s brand and trade openly under their name. For instance, if you decide to take on a Domino’s Pizza franchise, you are allowed to use all their branding, products and sales processes and essentially operate as one of their outlets although you are a business owner in your own right.
To do this, of course, you need to invest your own money in the business. How much will depend on the franchise opportunity being offered. In return, you get access to support and the supplies you need to run the business successfully, as well as ongoing training to develop your entrepreneurial skills.
People choose to take on a franchise because there is less risk compared to starting a business from the ground up. You are involved with a brand that already has a track record and has shown its potential to succeed. There is normally an upfront cost to pay and then ongoing payments for things such as stock as well as employee wages to cover. Some budding entrepreneurs use running a franchise as a stepping stone to finally developing their own business idea.
Some of the most popular franchise opportunities today come through easily recognisable household names. These include fast food companies such as KFC and Pizza Hut, gym services like Premier Sport and Anytime Fitness and car hire businesses like Europcar. But it’s not just big names that are involved in franchising. There are literally hundreds of franchise opportunities available across a range of different industries, companies with a proven track record who are now looking to expand.
Taking on a franchise is, like any business development, a pretty big undertaking even if it does have less risk associated with it. It’s not just the initial investment in the franchise but a case of choosing the right fit which works for you as an individual. Most franchisees look for people with the potential to expand their brand – they are often willing to give you the training and support you need as long as you meet their profile.
It’s not simply a question of finding entrepreneurs who have the money to invest. After all, there is a brand and a reputation to protect so franchisors want someone coming on board who is more likely to succeed than not. In other words, they want a business owner who will enhance their reputation, not damage it.