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Last Updated: Tuesday, 15 May 2007, 08:04 GMT 09:04 UK
The secret of business franchises
Middlesbrough High Street
High Street shops are often part of a franchise chain

Franchising basically means buying, or selling off, part of an established chain of businesses, such as a shop or restaurant.

Franchising combines the responsiveness of an owner (with a stake in the business) with the support structures of a bigger operation.

Your business expands without you having to buy another business or invest in setting up operations in new locations yourself.

However, you will need to invest in developing the franchise concept and marketing it to potential franchisees.

Franchisees buy the right to run a model of your business in a specific geographical region.

In addition, the franchisor charges an on-going monthly fee based on a percentage of the franchisee's sales or profit.

If a franchisee wants to leave the business or fails to make a success of it, they can sell the franchise on to someone else (subject to the approval of the franchisor).

Training and support

Before selling the first franchise, you must make sure that your business model is one that can be set up and run relatively easily by people who do not necessarily have industry-specific knowledge.

Franchisees will require a package of support to help them set up their franchises, including training in how to provide the service and run a business.

Preparing the support processes and documentation takes significant time and effort.

Franchisees will also expect on-going support. In particular, they will expect the franchisor to invest in marketing the franchise name.

And remember, the success of the franchise operation depends in part on the quality of each franchisee's service. One poor performer can damage the entire brand image.




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