Why Do Companies Franchise

Published: 12th October 2009
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If you've ever thought about having your own company, you might also have thought about franchising. When you do that, you don't have to build a completely new company from the ground up. Instead, you use the name and style of a company that's already established and you pay them to use those things. In turn, they help you get started and give you training and guidance. You have to do things their way, though, so you don't get the creative freedom that you'd be getting otherwise. Many people think it's a good tradeoff, because they don't have to try to build a brand in a market that's already pretty saturated. For the company that offers the franchise, it's also a good deal. They get paid, and they get another location. They help train the people, which they would have to do anyway, and as long as the franchisee is making money, the company is making money. It's hard for the company to lose money in that instance. Of course, there's no guarantee that the person who started the franchise will be successful. If he or she is not, there's always someone else who will come along and want the franchise.

For the most successful franchises, the company makes money and the franchisee makes money. It's a winning situation for both parties in that case, and it's a great way to move a well-established company into new markets. Of course, there's a lot more to getting a franchise than that. The company has to approve it, the franchisee has to be able to pay his debt back, and there are a lot of other specifics. It's best to work with a lawyer who is familiar with that type of law so that everyone involved is treated fairly and no one ends up agreeing to something that they shouldn't agree to just to get the contract signed - or because they didn't know that there was a problem with it. If you're interested in a franchise, make sure you know what you're taking on, how much you have to pay, what you get for the money, what happens if you fail, and other issues that are very important but that a lot of people ignore because they don't realize that they need to know these things. They jump in too quickly and everyone ends up losing money, which isn't a good thing for anyone involved, and that's true of the franchisee and the company he or she is trying to work with.

This article was written by Tom Sangers on behalf of Martin & Co Property Franchise who offer a great business opportunity in the form of lettings and management franchises

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