11 essential things you need to know about franchising

1 A franchise basically provides the franchise owner the rights to replicate the franchisor’s business, including using their branding and business model, within a designated territory.

2 The franchise package is the total franchise system purchased by the franchise owner, including branding, Franchise Fee, know-how, systems, territory, training and support.

3 Each franchisor provides a different training and support programme, however most will cover in-depth how to operate the business, including product and service knowledge, as well as ongoing support from head office.

4 Turnover is NOT profit – the turnover level is the total amount of money generated by the business, while the profit is how much the business has made after overheads (e.g. salaries, insurance, rent, bills etc.) and tax have been deducted.


5 The level of control a franchise owner has over their business varies from franchise to franchise, but keep in mind that by signing a Franchise Agreement, you are committing to following the franchisor’s business model which can include everything from which wholesalers to use through to how many locations you can open in your territory.

6 Due to franchising being considered a ‘safer’ option to setting up a business, most banks favour lending to those wanting to launch a franchised business over those looking to launch a new start-up.

7 There is no average day for a franchise owner, as their day-to-day work varies depending on what sector and type of business the franchise is – take a look at page 154 for this edition’s example.

8 The British Franchise Association (bfa) is the franchise industry’s regulatory body in the UK.

9 The franchisor/franchise owner relationship is often described as a ‘business marriage’ which, like a real marriage, is legally binding and should not be entered into lightly.

10 Most of the franchise opportunities in this magazine are single unit opportunities, meaning the franchise owner has the rights to open one location in their area. Other types of franchises are regional (where the franchise owner can open multiple units in a large area) and a Master (where the franchise owner owns the rights to open locations across an entire country).

11 The Franchise Agreement is a legally binding document that states the obligations of both the franchisor and franchise owner; do not sign this if you have any doubts about the franchise.