How Franchising Works
The partners in a franchise agreement are the franchisor, who grants the franchise licence to the franchisee, who invests in it.
Remember, a franchise is NOT an independent business. The franchisee buys the opportunity to run a business based on the franchisor’s established operational methods, often detailed in an Operations Manual. These methods ensure that all the products and services offered by the franchisee conform to consistent quality standards.
An Operations Manual eliminates the need for the franchisee to create a strategic plan on how the business is run. The business logistics, such as marketing, product assembly, service delivery, accounting, store layout, employee recruitment and training, are all mapped out. Most franchisors provide extensive training to the franchisee to help ensure that the business is run according to proven methods, making it more likely to succeed.
The obligations of both the franchisor and the franchisee are fully laid out in the Franchise Agreement. Some franchisors use a standard agreement, and some are customised.
It is essential for any prospective franchisee to consult with a solicitor experienced with franchise agreements and business contracts before signing any of these documents.
The agreement will stipulate all the terms of the business relationship, such as initial fees, ongoing royalties, territory restrictions, operational support provided, the length of the franchise licence, licence renewal, and selling or closing the franchise.
When you buy a franchise, you are agreeing to uphold the franchisor’s way of doing business. In return, you gain the right to run an individual (or multiple) business unit(s) built on proven methods and with a high probability of success.
See below an example of franchising at its best! And how you can find inspiration to invest and operate your own successful franchise...
Franchise Success Story
Maid2Clean North Manchester franchisee Linda Kenyon found Maid2Clean, the perfect business for her!
“Having searched long and hard for a business opportunity that would give me the freedom from bosses and the independence to set my own income, I never dreamed I would find what I was looking for. Everything I tried promised great riches and financial freedom, but it was never forthcoming and I became so sceptical with everything that I thought I was going to be stuck as a nurse forever, even though it was no longer what I wanted to do.
“Then whilst browsing through a franchise search engine, I stumbled upon Maid2Clean. I visited the website and made the usual enquiries but knew it wouldn't be for me; nothing would work anyway so why bother.
“I received a phone call from a chap called Mike, who invited me down to see him to take a look at what he had to offer. This became a bit scary now because this was face to face and I was quite sure he would take my money that day and leave me in the same old situation I'd been in before. So I put him off, decided not to go and said I'd speak to him again at a later date. Some time later Mike rang me back and we got chatting and I thought, well, let's go and see to it to put this man out of his misery because I know for a fact I won't be doing this business.
“I dragged my mate Pete down with me for moral support and because, like me, he was looking for something and had also been bitten in the past. He was so wary at the invite and all the way there kept telling me he was only going to give me an opinion, he wasn't going to buy a franchise...really!
“We met Mike and Elaine and felt immediately at ease with them. They were very warm and we both felt very comfortable there. We listened intently to what they had to say and by the time we left, we were so excited and impressed by what we had seen that I bought my franchise and Pete bought one a couple of months later.
“I have been trading since September 2005 and have steadily grown my business in that time. I work with my husband; he delivers the leaflets and I work in the office and in that time, we have managed to get 97 clients in just over 12 months of trading. The best part of this business is undoubtedly the ongoing residual income.
“Many of my friends, including my father, have ridiculed me for spending money on a franchise when this was something I could quite easily have set up on my own. Little do they know that without the support and advice that Mike and Elaine have given me over the past 12 months, I know I would have failed at the first hurdle. As it is, I have no doubt that this business will give me everything I have longed for all these years and I am now building a great future for myself and my family.
“Maid2Clean is without doubt the best decision I have ever made in my life and I am thankful to Mike and Elaine for giving me this fantastic opportunity and helping me along every step of the way.”