When it comes to entering the world of business, franchising is a concept that has become increasingly popular. With a franchise, you are buying the right to use the products and services of an established brand, while accessing support and mentorship from the original, or ‘franchiser’.
What Is Franchising?
Franchising is mainly associated with retail stores and restaurants. The arrangement is usually that you, the franchisee, will purchase the right to use the franchisor’s business name, products, services, and trademarks for a set period of time. As the franchisee, you will also be receiving training and support in order to help you manage the franchise and grow your business according to the franchiser’s business model.
Who Is the Franchiser?
The person or business that grants the franchise license to the franchisee is known as the franchiser. The franchiser typically sets the standards for how the franchisee is to operate the business, where the franchisee can sell their products, and what the franchisee can call their business. The franchiser is the one who provides the training and guidance, as well as marketing materials, to ensure that the franchisee is successful and the overall business is profitable.
Examples of Franchise Business Models
One of the most famous examples of a franchises is McDonalds, a global fast-food chain. The McDonald’s franchiser provides the franchisees with the support necessary to open and run their own restaurants, from training and marketing materials to operational instructions and product supply. Pizza Hut is another well-known franchise, and it follows the same franchising model as McDonald’s; aspiring store owners receive training and supplies from the franchiser in order to run their own restaurant.
Is Franchising Right for Your Business?
Franchising is an effective way to grow a business and create a strong brand presence, but it does come with a hefty up-front cost. Before launching a franchise, it is important to understand the legal requirements associated with the franchise agreement and the implications of being the franchiser or the franchisee in the arrangement. If, however, you feel that a franchising model is the best way to grow your business and increase its visibility, ensure you understand the roles and responsibilities of the franchiser and the franchisee to ensure a successful franchise.