What is Franchising?

Franchising is a rapidly developing multi-million pound marketing technique proven to be a successful method of business expansion. Many well-known national and international companies operate on franchise basis because when designed and implemented correctly, franchising enables maximum market penetration with minimum risk.

Franchising is potentially the most practical way to achieve controlled business without tying up much-needed capital or borrowing large additional funds for expansion. This is of increasing importance for new Entrepreneurs who require support from an experienced partner without a partnership.

The problems of recruiting, training and retaining a large competent workforce are removed. Central office overheads are reduced and a new team spirit develops. Significant savings can be achieved by bulk purchasing for the expanding franchise network.

In simple terms, the Franchisor grants to individual (Franchisee) the right to market goods or services, using the company name, image and logos, for an agreed system of fees. The Franchisor determines corporate procedures and specifies how Franchisees operate. The Franchisees, not the Franchisor fund and own their business.

Franchisees will wish to maximise profits and their entrepreneurial skills. (As they improve sales, the Franchiser’s overall income increases). Franchisor conducts group-marketing arrangements, thus benefiting from collective advertising and Business Promotions.

Consequently, Franchises are run by highly motivated business people who are far more committed to the success of the venture than any directly employed manager, representative or agent. This, in turn, has the important added benefit of reducing staff turnover at the critical points and allowing efficient control of the franchise network.

Each Franchisee has the benefit of belonging to an established business network, selling a well-known product or service. The trading name, corporate identity and business systems are all proven and recognised. Franchisees look after day to day functions, allowing the Franchisor to develop his business, control strategy, conduct marketing, undertake general administration and provide technical support, making it the perfect business partnership.