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Could I franchise my business?

When looking to grow a business, one possible method is to franchise it. Franchising will not work for all businesses but if your business fits the bill, it can be a quick and effective way to grow without requiring the size of capital outlay that might otherwise be required to take your business to the next level in its growth potential.

Franchising revolves around replicating an existing business which already has an established market position in one or more territories, whether in the same country or abroad. The franchisor will have a certain degree of control or influence over the franchisees operations and the franchisees should benefit from the established operations and reputation of the franchisor. Generally, the franchisor will levy certain charges on the franchisees and it may provide a range of centralised services for the franchisee network such as national or local advertising, for instance, or protection of intellectual property rights licensed for use to the franchisees.

The franchisor will often provide a manual giving details of how the franchisee should run the business and most franchisors will also offer centralised training to the new franchisees.

Unlike many areas of business, franchising as a model is relatively loosely regulated. Whilst a British Franchising Association exists, membership of the association is voluntary. There are, of course, many regulations that businesses generally will need to comply with – and these will be particularly applicable to food-related franchises – but the franchise agreement generally governs the relationship between franchisor and franchisee and this can sometimes be a lengthy agreement.

If this is of interest to you or your business, or you are considering franchising your own business or becoming a franchisee of another existing business, SM Commercial can provide advice in this area to enable you to make the most of the franchising model.

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Dated: 27/07/2012

Author: Greg Cox

Could I franchise my business?

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