Franchises come with a price, so, right form the beginning there is an initial start up cost involved, which enables you to run your business under the name of the brand you have purchased for your franchise fee. You will come across a range of confidential information that will help you understand and use the business model effectively.



Aside from the initial franchise cost, there are monthly management fees that are required in order for you to have constant and on-going support from the franchisor. This means that you will have full training right from the outset as the franchiser will walk you through processes in sales and marketing and generally ensure that you are able to overcome any obstacles you may face.

Franchising has a proven higher success rate than starting your own business from scratch. A study has shown that over a 7 year course, 90% of franchisees are continuing with their business profitably (US Department of Commerce). It is a lot safer in many respects, as guidelines have already been presented to you, from choosing the right location for your business to accounts and supply management. If you can mirror the operation instructed in the manual, your business should grow from strength to strength and inevitably become successful.

It seems that there is a huge element of risk involved if you decide to start a business individually as over a 5 year period, it has been calculated that 80% of new business start-ups shut down due to profit failure.

It usually boils down to this, people tend to know their product inside and out however the same does not apply for their understanding of the market, which can only be achieved through experience of tried and tested formulas. If you are not able to fund your business or have a steady flow of income coming through, banks are fast to leave you on your own as predicted financial projections are not depicted into reality.

Investing in a franchise will ultimately throw you into a set of procedures if you are to make it successful. This imposes a restriction on you as you will have to use the system, suppliers and software that are indicated to you by the franchiser. There will also be limits on the location of your business as the franchiser has brand values that he must uphold therefore he will not let you operate in an area where your business cannot reach its full potential.

You will represent the brand therefore your success is a major priority to the franchiser. By becoming a franchisee, you are joining an existing network and entering a company whereby the partnership works hand in hand to make sure you make significant progress and all intentions are achieved.