A Franchise Sales Services is a proven business format, which can be replicated by investors also known as franchisees. The Franchise Sales Services will grant the franchisee the use of the business name, logo, the right to market and distribute the franchisor’s products or services, in a given location or territory for a fixed period of time (usually five years, although this may vary from sector to sector), the full details of the franchise offering will be in the franchise agreement. Please note that it is essential that when reviewing the franchise agreement, the agreement is reviewed by a franchise solicitor. In most instances the franchise agreement can be renewed for a further term. Certain franchise brands will allow the franchisee to become a multi-unit owner or an area developer depending on the sector of business and availability.
Franchise Sales Services is a proven business format
To invest in a franchise, the franchisee must first pay an initial fee for the privileges to use the business, training, and the equipment required by that particular franchise model. Once the business starts trading, the franchisee will usually pay the franchisor an ongoing royalty fee, either on a weekly, monthly or quarterly basis. This payment is usually calculated as a percentage of the franchise businesses gross turn over. After the contract has been signed, the franchisee will open a replica of the franchise business, under the guidance of the franchisor. The franchisee will not have as much influence over the business as he or she would have over their own business, however, investing in a franchise business will require you to follow the proven business format. Examples of proven business formats or franchise businesses include McDonalds, KFC, Pizza Hut and Subway to name a few. There are further opportunities with new franchise business brands, where the initial invest may be less than a more established franchise brand, and potentially offer greater profits.
Franchise Business offer systems & support
Typically, the franchisor will command that the business model stay the same; for example, the franchisor will require the franchisee to use the uniforms, business systems, and signs or logos particular to the business itself. The franchisee should remember that they are not just buying the right to sell the franchisor’s product or services, but buying the right to use the successful and tested business systems.
The franchisee will also usually have to use the same or similar pricing in order to keep the advertising streamlined. Aside from using the business systems determined by the franchisor, the franchisee will otherwise remain an independent owner of the franchise business. There will be training given by the franchisor to the franchisee, ensuring that the franchisee fully understands the business concept and systems of the franchise brand. Some franchisors will have a team of area managers, specific trainers and support staff to assist the franchisee, adding value to their franchise brand. As with any investment you make, you should do your due diligence thoroughly before you make any final decisions to purchase.