A franchise is a business where a company which is already in operation sells its rights to an existing business model and logo to a third party operator. This operator is known as a franchisee, and has the right to offer products and services under the license given. For an increasing number of entrepreneurs, running a franchise is being seen as an attractive proposition.
Many companies throughout the US are run under the franchise system, across all areas of business. One successful sector is in the business to business sector, where the convenience offered by the local presence, yet the national professionalism of a known brand, makes sound business sense. However, for potential investors, it is important to understand what is involved.
Investing in a franchise
In order to operate a franchise, an initial investment is needed. Under this, the franchisee will be given rights to trade under the business name, use all intellectual property related to the brand, and have the right to the training and support needed to operate on a daily basis. All good franchisors will also provide guidance as to where to set up shop, and provide ongoing support and give direction as and when required to make the business work.
After the initial payment and set up, the business premises will be set up, and trade under the brand name of the franchise. Working to the established model, business opportunities and networks should already be in place to hit the ground running, whilst directing agreed royalties back to the franchisor at an agreed timescale.
Controlling the franchise
All good franchises will have a business which works, which makes them successful and helps them to thrive. There may be a need for uniforms to be worn for example, whilst certain price scales, products and services will likely have to be offered. However, all the best franchises will allow for flexibilities, ensuring the owner can take advantage of local conditions.
Though the basis of the model will needed to be stuck to, the individual franchisees should have the autonomy to run the business as they see fit. Ideas to push the business forward should always be discussed and support should always be in place to help with initiatives.
Securing investment for a franchise
One of the most attractive aspects for those looking to own a franchise is the improved chances of getting credit to invest. Lenders are more sympathetic to entrepreneurs wanting to start a franchise, as they are investing in a proven business model and can access the support and custom necessary.
Moreover, many of the best franchisors can help secure business and understand where the locations are that are likely to have a better chance of success. This all helps increase the potential for securing credit, as it minimizes the risks that a lender is taking.
At Minuteman Press, we have been operating our franchises for nearly 40 years. The best performing print franchise in the US, we have a proven business model and give our franchisees ongoing support and training to ensure the best results. Helping to find the best locations straight from the start, we also ensure continuity with our first class resale support.