If you want to start your own business but find yourself struggling to think of an initial, original idea or are concerned about the risks of getting it off the ground, a franchise may be a great solution for you. Keep reading to find out all you need to know from what a franchise business is to the agreements and fees involved.
What is a franchise business?
To put it simply, a franchise business is where a business owner (a franchiser) sells the rights to use their company name, trademarks and business model to someone (a franchisee). There will be an initial fee that the franchisee will need to pay and then usually they will have to pay a percentage of any sales or profits going forward.
What are the benefits to owning a franchise?
There are numerous benefits to owning a franchise and the good news is that it’s mutually beneficial to both the franchiser and the franchisee. Here’s some of the reasons why the arrangement is often so successful:
- A franchise allows the franchiser to expand the business, whilst also giving the franchisee the freedom to run their own business
- None of the difficulties that come with starting a business from scratch
- Get to benefit from an existing, working business plan
- Experienced team on hand to help and offer training
- Franchises are much more likely to succeed than new businesses
- Huge range of industries to choose from, ranging from fast food to health and beauty
What is a franchise agreement?
Once a franchise has been found and both parties are happy, a franchise agreement will need to be signed to ensure both the franchiser and franchisee get what they want out of the arrangement. The franchise agreement will outline any expectations from both parties and their rights. Prior to signing, it’s also essential for the agreement to be reviewed by a franchise solicitor.
It’s worth pointing out that franchise agreements won’t be forever – think of it like you’re loaning a business. Usually, they’ll be for an initial 5-year period and after that they can be renewed and extended.
What about franchise costs?
How much of an initial fee you’ll pay to join a franchise will vary wildly with some being as little as £10,000 and others in the millions. According to Small Business it’s common for the franchise cost to be between 5 – 10% of the total investment.
The ongoing weekly or monthly service fee can also range quite dramatically from 0 – 20%, with the most common being around 7 – 8%. However, if you’re selling products, the franchiser may also be paid by mark ups on products and equipment.
The Accountancy Solutions franchise opportunity
If you’re looking for a great franchise opportunity, did you know we offer one at SixtyFour8? We’re looking to expand our business so we can offer self-employed individuals valuable tax help all over the UK and we need your help! We’ll give you everything you need to get started including your own laptop, phone, centrally qualified leads and a regional marketing campaign.
If you can go out and get new business and facilitate a great relationship between the client and our accountants then we’d love to have you on board! Sound like something you’re interested in? Check out our franchise opportunity page for more info and to download our prospectus.
Starting your own business from scratch instead? Get more great accounting advice with our guide full of essential accounting advice for small businesses, next.