Franchising a business pros and cons
So you have a successful business & are seeking to grow, possibly through franchising but what are the franchising a business pros and cons?
Firstly you need to understand what is a franchise. A franchise model is a set of documents & support to enable another person to trade as you have done. You will find other articles here & advice on what documents you will need to franchise but firstly you need to decide is franchising right for you business?
Franchising is a very close & long-term business partnership. You have two parties, the Franchisor & the Franchisee. The Franchisor is the business owner, in other words you. The Franchisee is the person that invests in your franchise. Many franchise agreements are a min of 5 years. You will need to help the Franchisee at every stage of the business. This will include setting up the business, launch & ongoing training & support. Many Franchisee’s have never had a business before so you will need to go right back to basics & help that at every stage.
Franchising can be a great way to grow a business quickly. Raising capital through recruiting franchisee’s can enable you to fund growth quickly & without risk. Franchising is also a great way to avoid managing a lot of staff & potential liabilities that can come from that.
That said it comes at a price. Once you franchise you will need to support your Franchisee’s & have legal obligations to do so. The relationship dynamic between a Franchisor & Franchisee is completely different from that of the employer & employee relationship. A Franchisee is a business partner, not a member of staff. They work remotely, potentially even internationally so you will lose some control so recruiting the right people is vital to your franchise being a success.
Before you franchise your business you should seek professional advice. QFA Partner members include franchise consultants, lawyers & other services to help you decide if franchising is right for your business. To view all member visit our Partner Directory.