Business Franchising - an Overview
The term franchising refers to a process in which a person agrees to pay for a part or all of the business strategies of an existing company. As a concept franchising has been around for hundreds of years although it wasn’t until the 1950’s that it became more widespread. As its popularity grew so did its creditability and so now business franchises represent a significant part of the UK economy.
What is Franchising?
Probably the most basic form of business franchise is product and brand name franchising. In this type of franchise a person agrees to pay for the right to use a particular brand name or to sell a type of product. The franchising company creates and markets the brand before selling it to franchisees.
More common than simple brand name franchise agreements are business format franchises. This type of agreement involves a much broader relationship between the franchising company and the franchisee. The franchisee pays for the business, operating and marketing strategies of the franchise. Also likely to be included in the arrangement is initial training and ongoing support to help the franchisee to achieve maximum success.
What are the benefits of Franchising?
The reason that franchising has become popular is that the agreement has potential benefits for both the franchising company and the franchisee.
For a person who wants to manage their own business franchising can offer a simpler route to success. Starting a new business can be a complex process however by buying an existing franchise many of these difficulties can be avoided. A key benefit for the franchisee is that they are buying into an existing brand with a known customer base and operating strategies already established. It is likely that marketing campaigns will have already taken place and the costs of any future marketing will be shared between the franchising company and each individual branch of the franchise.
Additionally many if not all franchises provide on-going training and support to their franchisees. For people without prior experience of running their own business this can be a particularly attractive feature of the franchising process.
The main advantage for businesses choosing to franchise is that it allows for a quicker expansion of their company than may otherwise have been possible. A further benefit is that a large part of the usual day to day running of each branch is delegated to the franchisees
About the Author:Wok2go is a food franchise to buy in the UK. Visit wok2go.co.uk to find out more about its UK franchise opportunity.
Article Source: ArticlesBase.com - Business Franchising - an Overview