Franchises

Franchise

The best known type of franchise is the business format franchise. The franchisee buys a licence to trade under the existing business name from the franchisor. Most high street names operate in this way such as McDonalds and Next.

Advantages of a Franchise

* Franchises offer you the chance to go into business yourself even if you are lacking in capital or business experience.

* Franchises provide a head start to the business owner by providing support on an as-needed basis

* Franchises have interest in your Success. Many offer extended training and assistance with business set-up, personal training, collective buying power, and advertising.

* Franchises give you a head start when starting your business as you can profit from the name recognition of the business

Disadvantages of a Franchise

* The cost of buying the contract for the business can be very expensive

* Profits which are made have a certain percentage that are given to the franchisor

* Franchise agreement can be withdrawn

* You have to go by the franchisors rules, this could mean you must have a certain dress code, hours and products you sell

Under the Franchise Agreement one Entity (the franchisor) grants to another Entity (the franchisee) the right to deliver goods and services to the marketplace under the franchisor’s trademark or trade name in exchange for a license fee.

The franchisor provides the franchisee with a proven business system covering the supply of products, equipment and training thereby keeping a degree of control over the way in which goods and services are marketed.

This document defines the terms and conditions under which "the franchisor" appoints "the franchisee" and specifies the rules under which the Franchise must operate.

You may want to change from being in a franchise because you do not have allot of control of what you can do with your company, because if you set up your own business you can go by your own rules of dress...