Franchising Your Business
Franchising can be an easy way of expanding the business but it should not be taken lightly. It can be both financially and economically rewarding for you. However you need to understand few things before going for it.
If you are thinking of franchising your business then I hope you must understand the meaning of this term. Franchise means allowing an individual or a group of people called franchisee to market and sell your products or services with your trademark. The other party is known as franchiser. In return the franchisee needs to pay royalties and fees to franchiser in order to use these rights. Franchising is a method of business expansion as your business gets new market and potential customers. It increases your turnover and hence your business.
Franchising helps you to expand quickly with less investment but you need to analyze few things. The first thing that you should list is all the advantages of franchising your business. Some of the most common advantages of franchising are it increases your customers and hence your purchasing power. People become familiar with your trademark and it becomes easy for you to gain their trust. There are some disadvantages too like you will lose some amount of control over your business like you will get only some share of the revenue generated by a franchise.
Before starting a franchise of your business, you need to analyze it perfectly and decide whether it’s possible to open franchise of your business or not. Maximum business models can be franchised but there are some businesses that can’t be franchised as it’s not easy to train an individual to do it in right way. Also some seasonal businesses can’t be franchised. So think over it initially.
Also you need to fulfill the basic requirements of opening a franchise depending upon the rules in your country like as per British Franchise association, you need to complete one successful year of your business to qualify for franchising.
Another thing that you will need in franchising is an operating manual that should clearly describe your business and things associated with it. It contains every requirement for running franchise successfully including sales, marketing, accounting and reporting. It acts like a guide for your franchisee.
Franchise agreement is a part that can’t be taken casually. It is like a legal bond between two parties and preserves their rights. It allows the franchisee to use your trademark and business model and also state the working conditions for him.
As a franchiser, you need to take care of these things in order to establish a successful franchise and avoid any future litigation.
