Buying a franchise is not for everyone. This guide will help you evaluate whether buying a franchise is right for you. It will help you understand your obligations as a franchise owner. Many people dream of owning and running their own business but are often let down by
reality of doing so. 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.
Royalty payments: You may have to pay franchisor royalties based on a percentage of your weekly or monthly gross income. You often must pay royalties even if your outlet has not earned significant income during that time. In addition, royalties usually are paid for right to use franchisor's name.
