Despite the credit crunch, could franchising provide a way to grow, or start, a business? Oxfordshire-based Brian Duckett, executive chairman of Howarth Franchising Group, argues that it could be the way forward.
Having been involved in franchising for more than 30 years, as a franchisee, a franchisor and an advisor to growing businesses, I truly believe that any business which can be run as branch network, and which wants to expand, should at least consider franchising as an option.
I also believe that anyone planning to start their own business should first consider becoming a franchisee.
Put simply, business-format franchising is a commercial relationship in which one party allows the other to operate clones of a proven business system in return for initial and ongoing fees.
It involves duplicating a successful business system by teaching others how to operate it. Those being taught make their own financial investment in opening the unit, while those doing the teaching generally own a brand, which they want to grow and protect. So it is in both of their interests to work together and operate profitably.
Even in the current economic climate, all the major clearing banks which have specialist franchise sections are keen to lend money to franchisees.
This is because it has been proven to be many times safer than lending to independent start-up businesses, more than half of which disappear before their fifth birthday. The failure rate for franchisees is less than five per cent a year. Read full article.
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