A franchise is business in which you have a ready made plan and technique for operation is available, and all you have to do is start the business based on the model in your own region. The franchiser, the supplier of the technique, charges a royalty fee in exchange for a package of services and rights that it allows the franchisee to share. These normally include

• The brand name

• Operating techniques and skills

• Technology and product support for the length of the contract or as agreed

• Technical and business training for staff and management

• Manuals and guides on operation

• Sales and marketing skills and client service assistance

• Financial management and administrative services

The franchisee is then required to operated according to the processes and systems laid down by the franchiser and observe the standards.

There are a few merits to starting a franchise. For instance, if you fear that your business pattern will not succeed or even fear eventual failure, then a franchise is your ticket to the games. The royalties, however, are deductible from the profits and charged as a percentage of the turnover. There are added features to a franchise that are not normally associated with a new starter.

A well established brand
A brand name such as McDonald’s or KFC are famous world over, and thanks to franchising, people in several countries and communities share the same taste and enjoy it wherever they go for it. This helps bringing in business for a starter too, as it is expected that the quality will remain the same with the same treatment.

A successful business model
The biggest benefit a franchisee can receive is by using a tested approach to management. It won’t require going through the same troubles of setting up as the franchiser has already been there for you. You have an edge in avoiding expensive mistakes caused in trial and error.

Training
Normally, franchisers provide training facilities to their franchisees. This allows the staff members to learn the story behind the business. Furthermore, some sharing of technology also takes place as the same system and pattern is adopted worldwide.

Publicity support
Each time a franchiser advertises in its region, others are automatically recognised. Two franchises in the region can also benefit by cost sharing, allowing each other to seize the opportunity of public demand.

Business support
A franchiser always provides business support to their franchisees to warrant their success, resulting in higher royalties for the franchiser. They provide continuous assistance to make sure the principles of the franchiser are followed and standards are maintained.

Not all is green in the picture. There are some pitfalls in franchising which are normally overlooked.

A franchise can be a costly operation
The price for obtaining a franchise depends on what sort of an establishment they have. The expenses may vary with specific amounts as up-front or initial payments for registration purposes and continuous royalty payments on the turnover per annum with no regard to the level of profit.

The franchiser may exercise control over your actions
Often franchisers try to take control of the activities that ought to be under your control. They may require you to follow their policies in complete congruence, not allowing room to vary according to the market conditions. They may even require you to purchase certain equipment from them, regardless if you can get them for cheaper rates in the market.

Franchisers may restrict your scope to move forward
A franchise may trap you from settling any contracts without the consent and approval of the franchiser. It may restrict your decision-making powers formidably, including the right to sell the franchise to another party. A franchise may make certain training procedures mandatory, although they may seem unnecessary and time consuming.

Check for the terms of contract between you and the franchiser. Certain terms and conditions must be discussed and mutual point of agreement must be reached before things get out of hand. Make sure that you are able to exercise maximum control over the activities that fall in your region. It is also useful to research your prospective franchiser before embarking on a lone mission where the next step is not known.