It’s potentially lucrative, but remember, you’ll be investing your money and taking a business risk.
For that reason, we strongly recommend doing some homework before you commit yourself. Examine every aspect of the franchisor, including its history and financial standing, its trademark protection, its reputation in the market and the profitability of existing franchisees in your area. Then, let TLS Solicitors help you evaluate the pros and cons of franchising to help you decide if it’s right for you.
1. Being your own boss.
This is a key motivating factor for many franchisees. You don’t need your own business idea, extensive experience or unlimited cash to set up as a franchisee.
2. Reduced risk
Franchising gives you a proven business format and a fixed revenue model.
3. Market intelligence
A good franchisor will share information about global changes and developments in your industry sector. This can help you grow your revenue locally.
As a franchisee, you’ll be operating under a recognised and trusted brand name. This can accelerate business growth and allow you to break even earlier.
Most franchises agreements grant exclusivity within a certain geographical area.
Buying into a recognised and trusted brand name will come with a price tag.
Many franchise agreements only permit you to sell your franchise to a purchaser approved by the franchisor. This can make it difficult to leave the franchise, even when the contract expires.
3. Lack of control
You may have little input into new product development. You might also have to contribute towards the costs of marketing campaigns or promotions that may not benefit your business.
4. Risk of revocation
If you breach the terms and conditions of the franchise agreement or franchising manual, the franchisor may revoke your licence to trade.