Franchising In A Nutshell

There are two parties involved in Franchise Agreement; the franchisor, who grants the franchise licence, and the franchisee, who invests in the brand.

As a franchisee, you’re not buying an independent business, instead you are buying the opportunity to run a business based on the franchisor’s established operations methods, which will be detailed in the operations manual. Think of franchising as paying someone for their business strategy, marketing strategy, operations strategy, and the use of their branding. That's pretty much what franchising is -- you are establishing a relationship with a successful business so you can use its systems and capitalise on its existing brand awareness in order to get a quicker return on your own investment.

This is essential what a franchisee is paying for, the use of a tested strategic plan thus eliminating the need to create one from scratch.

Almost every franchisor will provide training, to new and existing franchisees, to help ensure that the business is running in conjunction with the proven methods.

It is vital that you, or any potential franchisee, consult an experienced franchise solicitor before signing any documents. The agreement will stipulate all the terms of the business such as fees, Management Service Fees, territory, franchise licence length and what happens in the even of selling or closing.

When you buy in to a franchise, you are agreeing that you will uphold the franchisors way of conducting business. In return for your investment you gain the right to run an individual or multiple business units with all the proven business methods, giving you an even higher chance of success.