The Franchise Company

Head Office: Regency House | 51 Coniscliffe Road | Darlington | DL3 7EH | Tel: +44 (0)1325 251455

London Office: Communications House | 26 York St.| London | W1U 6PZ | Tel. +44 (0)207 000 1018

www.franchisecompany.co.uk

THE BENEFITS OF FRANCHISING

Benefits to Franchisors

The precise benefits of franchising to a franchisor will vary from business to business depending on factors

such as the type of business, the market and the company’s reasons for franchising. Generally however…

• The business can expand with less capital (and therefore more quickly) than with the traditional

route of opening company-owned ‘branches’, since the start-up costs of opening in each new area

are met by the franchisees.

• Franchised outlets or areas generally perform better than company-owned ‘branches’, because

franchisees, with their own capital invested in the business, are more committed to its success than

employed branch managers.

• Outlets or areas that are geographically remote from head office are less troublesome to control

when franchised, again because of the vested interest of the franchisee in the success of that

outlet/area.

• Via the franchise agreement the franchisor can exercise a

much higher degree of control over franchisees’

activities and the service delivered locally than with,

say, distributors or agents.

• The day-to-day running of the individual outlets

becomes the responsibility of the franchisees.

• The resources needed to build and support a

franchise operation are generally less than a

company-managed network.

Benefits to Franchisees

Franchising is generally considered to be a much less

risky way to go into business because…

• A properly constructed and ethically run franchise is a

proven business model that’s been run successfully by the franchisor in substantially the

same form that franchisees will run it. The franchisor has developed, tested and de-bugged the

business format, identified and solved all the major problems and acquired the essential know-how

for running the business. Franchisees benefit from this experience and know-how in the form of

training and ongoing support.

• A successful franchisor will have developed marketing and business generation skills and may carry

out national/regional marketing campaigns on the franchisees’ behalf, to the benefit of the brand

and the entire franchise network.

• As part of a larger network or ‘family’, franchisees benefit from greater brand awareness and

customer confidence.

• A good franchisor has a vested interest in the franchisees’ success and will constantly work on the

franchisees’ behalf to improve all aspects of the business - products and services, operations

procedures, marketing methods, administration and accounting systems, etc.

• It’s a well-worn phrase but as a franchisee you’re in business “for yourself but not by yourself”.

The Franchise Company is a specialised franchise consultancy business that’s been helping and advising

prospective franchisors and franchisees since 1991. To find out precisely how franchising can benefit

you or your business, call us on one of the numbers below.