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At a
time of economic uncertainty, franchising provides the perfect
opportunity to start a business and has proven to work with
franchises contributing £12.4bn to the UK economy last year and
that figure is set to rise this year. It has already been well
recorded that franchising is the expanding industry in a slowing
economy, so it is understandable that more and more of us are
considering franchising as the next career step and in many cases are
partnering with a family member or friend for support.
Starting a business with someone
you know well may seem like a good idea as it removes the inherent
loneliness of some business start-ups; but conflicting views may
occur when a decision has to be made such as, the name of the
company, the style of the brand, or mechanics of the operation,
causing stresses on the business and the relationship itself.
Franchising reduces, if not removes, many of the hurdles that can
flaw many start-up businesses, so is it easier to run a franchise
with a close friend rather than starting your own business from scratch?
Franchising does not
automatically mean that you can start up a business with your partner
and live happily ever after. Hard work, dedication and a professional
approach is required. However, many of the stresses put upon the
relationship are removed simply by the fact that a franchise provides
a proven business model.
Friends and families in business
together do not always put into practice a good business plan as they
can spend more time talking about it, and generating ideas, than
implementing them. With a franchise you can avoid the 'dreaming
stage' and get involved in actually making the business work, rather
than worrying and arguing about the fundamental start up decisions.
The brand is already established and all the other aspects are
already set-up for you. Leaving the investors to get on with actually
making the business work.
Franchising gives an essential
structure of support, management quality and cost saving. A franchise
business model allows a successful business to replicate itself by
bringing in new franchise owners to run new outlets, under licence
and agreement.
When entering into a
family/friend business partnership the tendency might be to neglect
formalities, which can causes problems later on in the relationship
when conflicts arise. Going down the franchise route means these
formalities are already in place and a written agreement will have
had to be agreed.
Having a licensed agreement,
gives you and your partner an arrangement to follow. Having
straightforward black and white guides prevents any awkward decisions
having to be made, leaving the franchisees free to run a driven
business and make it work.
You automatically become your own
boss, but under the safety and security of a proven model, with
national support structures put in place to help overcome many of the
business hurdles that can flaw many new business start-ups. A family
business has the ability to take the long term approach without the
pressure of shareholders wanting immediate returns.
Banks are more likely to invest
in a franchise than a new start-up business, due to the robust
business plan which automatically eases the tension between you and
your partner. Knowing you have financial backing from a bank can
prevent unneeded stresses entering the business. Banks will only lend
up to a maximum percentage of the value, so having a close friend on
board can help out with further investment creating a sense of
personal ownership of the business.
With any business day to day
stresses will get in the way and usually two heads are better than
one, but with franchising you receive constant support, training and
advice. Having an established brand behind you will increase the
chances of success. A franchise removes the 'headaches' most start-up
businesses cause.
Going in to business with someone
does provide that extra edge on generating ideas, additional
motivation and a diverse range of business skills. Franchising helps
push these factors forward as it is already a working businesses
structure, leaving you and your partner free to be creative and enjoy
the success of running your own business.
About
The bfa
The British Franchise Association
(bfa) is the voluntary self regulating governing body for franchising
formed in 1977 by the major franchising organisations looking to
accredit and promote those franchise systems that meet the strict
ethical and business criteria of a good franchise.
The term 'franchising' has been
used to describe many different forms of business relationships,
including licensing, distributor and agency arrangements. The more
popular use of the term has arisen from the development of what is
called 'business format franchising.'
Business format franchising is
the granting of a license by one person (the franchisor) to another
(the franchisee), which entitles the franchisee to trade under the
trade mark/trade name of the franchisor and to make use of an entire
package, comprising all the elements necessary to establish a
previously untrained person in the business and to run it with
continual assistance on a predetermined basis.
The bfa hold a full list of all
of its members and the code of ethics to which these members
subscribe to on its website: www.thebfa.org
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