Types of UK franchises and their functions
UK franchises have gained immense popularity over the last few years, and have become a major part of the UK economy. Franchising is an agreement where a company sells its rights to a new company, and a person or group to sell its products and services. Pioneering businesses are making active use of franchising in order to penetrate the market quickly. There are different types of franchise agreements, and they all differ slightly.
Manufacturing Franchises: This type of franchise agreement is very common in the food and beverage industry. In this agreement, the franchisor allows the franchisee to manufacture its products under its brand name. The franchising company receives an initial fee for the agreement and may also receive an extra fee for every product sold.
Product Franchises: This type of franchising agreement is used to distribute products. The franchisor allows the franchisee to sell its products under its brand name.
Business franchise ventures: In this franchise agreement, the franchisee buys and distributes the products for the franchisor. The client base is provided to the franchisee to sell the products.
Business Format Franchises: This type of agreement is more complex, and demands a broader relationship between the franchisees and the franchising company. The franchisee’s investment involves buying the operating processes of an existing business, along with its products and brands.
Different types of UK franchises are suitable for different purposes. However, they are all a great way to get started in business.