Franchising is a method of expanding your business by licensing your intellectual property rights such as trade mark or trade name to a franchisee who pays you a certain amounts of fee to operate the business using your specific business system or know how at a specified period of time. The franchisee shall conduct its business operations in accordance with proven standards and specifications that have been well established

 

The advantages are

 

 franchising will allow you to expand your business without expending significant capital per unit

 franchising also allows you to grow your business on a much faster level than you would generally be able to do on your own

 reducing your exposure to risks relating to signing leases, additional financing and vicarious liability for employee acts

 

Before embarking on a franchise, a business owner should always consult a franchise consultant to conduct a Franchise Readiness Audit on his business to determine its franchise readiness

 

A Franchise Royalty Fee is an ongoing fee that the franchisee pays to the franchisor as part of the term stipulated in their franchising agreement. The fee is typically paid on monthly basis and calculated as a percentage of gross sales

 

One of the main reasons of considering buying a ready franchise instead of starting your own new business is that the franchise business can offer you the opportunity to go into business for yourself with a much better chance of success rate. This is because most franchises offer a proven business model and recognized brand as well as provide training and management and other technical assistance and guidance