Franchising: How does it really work?

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Thinking of buying into a franchise but not sure how it works? Most people are aware of bigger companies offering franchise opportunities such as McDonalds or Costa Coffee but there are lots of smaller successful franchise operations out there – like ours – that will allow you to build a successful and profitable business.

So what does buying into a franchise actually mean?

Essentially, a franchisor is a company owner who allows the franchisee – someone who has bought into the business to run their own branch of it – to use their trademark, business model and distribute their goods or services. The branding is already in place, as is the website, marketing materials, legal documents and insurance, etc. For this the franchisee pays either a monthly fee or a percentage of their profit.

It’s also worth noting that, as a lot of franchises will be approved by and have a prior agreement with a high street bank, as long as you pass the credit check it can be easier to obtain finance to buy into a franchise as it is a proven track record and the business is much more likely to succeed than going into it by yourself.

Franchising is based upon a long-term business relationship between the franchisor and the franchisee, so before you sign an agreement you need to be reassured that you can work with your franchisor. It’s in both your interest to see the business succeed, so having a good relationship with your franchisor is essential.

A good franchisor shouldn’t just assess your suitability, they should encourage you to interview them as much as they interview you. When interviewing a potential franchisee for the first time, I always talk them through our business model but I also allow plenty of time for questions. I actively encourage them before the meeting to put together as long a list of questions as possible for me to answer, so that I know they have thought through every aspect of the business and they will then be in a good position to make a decision on whether this particular opportunity is the right one for them

If both parties decide to proceed, it should be more than signing an agreement and handing a cheque over to the franchisor. Buying into a franchise should eliminate the hard work of setting up a brand new company. At Cleanhome we offer our franchisees a proven business model. When I set up the first Cleanhome branch, there was a steep learning curve. By going through the process myself, I was able to address any issues that franchisees may face and have ironed out any potential problems.

Ongoing training and support should also be an integral part of franchising. At Cleanhome we offer an initial two day training programme, which includes information about compliance with health and safety regulations and insurance requirements. I also offer participative development including practical role-playing exercises which aim to make franchisees feel confident about the selling aspect of the business. We also send the new franchisees out with an existing franchisee so that they can see how an experienced person deals with potential clients.

In addition, the franchisees benefit from two additional training days every six months and all of our franchisees can always get in touch with me at anytime if they are unsure about something.

Being a franchisee essentially offers you the independence of small business ownership supported by the benefits of a bigger business network. For people keen to branch out on their own, franchising can be the perfect solution.

So would you make a good franchisee? Keep an eye out for our next blog where I will be sharing the qualities essential for a good franchisee.