Posted: Fri Sep 27, 2013 9:45 am
Franchise costs cost can vary considerably.
There will be an initial set up cost and this will depend on the business and what you are getting for your money. We are a franchise and the franchisor takes a monthly percentage of our earnings, as well as other compulsory costs such as computer licences, PII insurance, training packages, marketing etc... Some franchisors insist you buy their products or components (i'm sure Ratty will have to use Chipsaway approved paint, even if he can get an equivalent price for half the price).
In return you get to use an established brand and have a large part of the headache of running a business taken away from you. For me one of the major benefits is that our HO has an FCA compliance team and they handle the headache of regulation. We still have loads of FCA stuff to here, but they study the 9500 pages of rules and make sure we implement them. Without that i would have to pay someone to handle all our compliance monitoring.
Downsides are that you have to work within a "method" which can be restrictive.
For us it is definitely a good thing, it works well for us and i don't think we could trade as an independent these days.
Some types of business aren't so good on a franchise basis and people often regret joining a franchise when the realisation hits home that with a bit more effort they could have done it on their own and all their money would have been their own. When the contract period is up, they then often go out on their own. For instance, i've seen this with many valeters that started out with a valeting franchise.
Like everything in business, you need to weigh up the pro's and con's and decide what is going to earn you the most money with the least effort.
There will be an initial set up cost and this will depend on the business and what you are getting for your money. We are a franchise and the franchisor takes a monthly percentage of our earnings, as well as other compulsory costs such as computer licences, PII insurance, training packages, marketing etc... Some franchisors insist you buy their products or components (i'm sure Ratty will have to use Chipsaway approved paint, even if he can get an equivalent price for half the price).
In return you get to use an established brand and have a large part of the headache of running a business taken away from you. For me one of the major benefits is that our HO has an FCA compliance team and they handle the headache of regulation. We still have loads of FCA stuff to here, but they study the 9500 pages of rules and make sure we implement them. Without that i would have to pay someone to handle all our compliance monitoring.
Downsides are that you have to work within a "method" which can be restrictive.
For us it is definitely a good thing, it works well for us and i don't think we could trade as an independent these days.
Some types of business aren't so good on a franchise basis and people often regret joining a franchise when the realisation hits home that with a bit more effort they could have done it on their own and all their money would have been their own. When the contract period is up, they then often go out on their own. For instance, i've seen this with many valeters that started out with a valeting franchise.
Like everything in business, you need to weigh up the pro's and con's and decide what is going to earn you the most money with the least effort.
