By purchasing a franchise, you often can sell goods and services that have instant name recognition and can obtain training and ongoing support to help you succeed. But be cautious. Like any investment, purchasing a franchise is not a guarantee of success.

A franchise typically enables you, investor or "franchisee," to operate a business. By paying a franchise fee, which may cost several thousand pounds, you are given a format or system developed by company ("franchisor"), right to use franchisor's name for a limited time, and assistance.

While buying a franchise may reduce your investment risk by enabling you to associate with an established company, it can be costly. You also may be required to relinquish significant control over your business, while taking on contractual obligations with franchisor.

Outlined below are some of main points you need to consider before buying a franchise:

Franchise fee: Your initial franchise fee, which may be non-refundable, may cost several thousand to several hundred thousand pounds.

Initially, there are two types of businesses available to you, Sole Trader or Partnership. Both are explained below:

Sole Trader:

This is easiest and least costly way of starting a business. A sole trader can be formed by finding a location and opening door for business. There are likely to be small fees to obtain business name registration. Lawyer's and accountant fees for starting business will be less than other business forms because less preparation of documents is required and owner has absolute authority over all business decisions.

Partnership:

There are several types of partnerships. The two most common types are general and limited partnerships. A general partnership can be formed simply by an oral agreement between two or more persons, but a legal partnership agreement drawn up by a lawyer is highly recommended. Legal fees for drawing up a partnership agreement are higher than those for a sole trader. A partnership agreement could be helpful in solving any disputes. However, partners are responsible for each other's business actions, as well as their own.

Useful Information:

Starting and managing a business takes motivation, desire and talent. It also takes research and planning. To increase your chance for success, take time up front to explore and evaluate your business and personal goals. Then use this information to build a comprehensive and well­ thought­ out business plan that will help you reach these goals.

The process of developing a business plan will help you think through some important issues that you may not have considered yet. Your plan will become a valuable tool as you set out to raise money for your business. It should also provide milestones to gauge your success.