Franchising For Beginners

A business partnership or even business marriage perhaps best describes the relationship that exists between a business owner of the franchise and the individual looking to take up the business. The individual purchases licence rights to utilize the business strategy in a specific arena for a set time with training, marketing and branding provided by the franchiser. The franchisee is provided with a tried and tested formula that works. They get a brand, a corporate identity, knowledge and other support to ensure that the business thrives.

The business owner invests time, money, effort, and knowledge to create a business formula that is capable of being duplicated by others. By replicating this formula individuals are capable of starting a business based on a solid structure, established brand, and backed by experience and support.The individual benefits from this agreement by being able to expand to other regions without the need of capital investment. To make all of this possible however relies on the guidance of an expert - this is where FDS Southern can help.

There are many types of franchises. The investment type is where the owner puts up a large part of the capital to finance a high cost business system, e.g. hotels and restaurants. Even though the owner retains overall management this type of business model often involves hiring others to manage the outlets.

When the owner controls numerous areas or manages a team of operatives this is called a management franchise. A typical example would be a van operated business run from a depot/hub.

Executive type are those run by individuals and are often white collar businesses such as financial consultancies and personnel consultancies. In these case a premises are not important because the business is take to the client.

Unlike the investment type the retail owner is the operator. This type of business involves heavy investment in property, equipment and staff. This type of business can be sold for a profit by the owner should they wish to cash in on their investment or retire.

The fifth type of business is the sales and distribution model. This is where the owner is selling or distributing products in a region and possibly where other delivery personnel are employed to cover areas as the customer base expands.

The typical man with a van business is called a mobile servicing/job franchise. Examples of this type would be an installation business, repair service such as a mechanic or cleaning service.

If you are looking to sell your business to others you need the advice of a good consultant. A specialist is required to look at the legal nature of the agreement, to examine the marketing package, and to basically help the franchisor build a package that can be reliably setup as a viable business model.

Bo_M_Hol

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