There are a number of commonly asked questions when it comes to franchising. Some wonder, if you are using someone else’s business model, and you have to answer to a franchisor, are you still your own boss? Others still yet wonder if other franchisees in the same franchise are competition, or are they colleagues. Going further still yet, many wonder if perhaps you need special skills or if franchising is something that anyone can do. Here, we’ll touch on a few of the basics and sort of explain how franchising is one way to open a business and become self employed.

What is Franchising? To put it very simply, franchising is paying someone else to use their business model, marketing and operations techniques, and the use of their brand name. You buy into an already successful business, and benefit from its brand and experience. In some ways you are not your own boss, in others you are- there is still yet a certain level of flexibility that one gets from franchising. However, in the aspects where you aren’t your own boss, generally the benefits outweigh that. Being able to have that backing and support can be a big benefit and many who have gone into independent business can tell you- support is very important. Not only that, with franchising, you tend to get a much quicker return on your investment, and reduction of risk is a big factor as well.

The fact that franchises are usually more quickly up and running is easy to explain- if you look down the street in any given town, and think about the franchises you see, such as McDonalds- they are all the same. The same basic build, same basic operating procedure, same training, same products, and the same marketing. This makes it very easy to set up, and done quite quickly which in turn makes it a faster road to turning a profit.

There are however a few things with franchising that you don’t have with independent business. In order to purchase a franchise, you’ll first need to pay a franchising fee. This is the amount agreed upon and paid at the time of signing a franchise agreement. Usually this fee only covers the right to use the name and the system, but in some cases may include other things. There are also ongoing fees known as royalty fees- and these are generally a percentage of sales, the terms of which will be drawn up and outlined in your franchising agreement. Still, general running costs for franchises are typically a little less than independent businesses.

This is just a simple run down of franchising, itself. There is much more to it than just the fees and brand recognition, but on the whole, franchising affords people another option for business ownership. This option is usually well laid out and more organized that independent business, and as such, is generally a good option to narrow the risk margin and for faster start ups.

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