Overview of Franchise as a Way into the Plumbing Sector

Thinking of running a business but wary of the risks involved in starting it up independently? Franchising could be the right option for you, as it offers you the opportunity to work with an established concept instead of coming up with your own business idea. You will be able to take advantage of a tried and tested area by working with an  already recognised brand name. Your level of control in running the business will be limited to certain degree. For instance, you will own and operate your own outlet, however your franchisor will retain control over how the products and services are sold. If you have a personal interest in a particular area of business, franchising is an exciting way of making your dream happen.

Franchising explained in more detail

Franchising  is when the owner of the business (the Franchiser) grants a licence to another person  or business (the Franchisee) to use their business idea. According to the terms of the agreement the licence will be for a fixed period of time, and will give the franchisee permission to use the franchisor's brand name, product, service and association. Therefore you will be using the franchiser's  recognised brand name, and working to make a return on your investment, using the franchiser's products and services. The franchiser will have all the necessary equipment, supplies and training ready for you to use. It will be up to you to play by the rules of the system.

What are the advantages of franchising?

If you are thinking of buying a franchise, there are many advantages associated with this. You should think about some of the following:

• The level of risk associated with investing in the business is reduced substantially. If the other franchises have already been successful, you will be working with a proven idea, and should be making profit faster
• Customers prefer to deal with well known brands rather than the 'unknown'. People enjoy the comfort and security an already established brand offers them. The more recognised the brand name is, the more you will benefit from it.
• The franchisor will in most cases, be able to offer you on-going training and support. This will be extremely beneficial to you as you will gain useful tips and knowledge from an already experienced business set-up
• You will be likely to gain financial assistance from banks much more easily. This is due to the fact that banks are more willing to lend money to franchises with a good reputation

There are also some disadvantages associated with franchising. Here are some pointers to think about before you make your final decision:

• There is a certain lack of independence associated with franchising. This essentially means that you are not in control of the show, and you may have to adhere to certain restrictions on running the business
• The costs involved in running the franchise may be higher than you expect. There will be on-going management fees and you have to buy products from the franchiser
• You have to be prepared for the fact that there is a risk of the franchise going out of business. The world of business generally is never certain, and this should be kept in mind
• Not every type of franchise will offer you the same level of support and training. This is something that will have to be investigated further by you in order to establish what degree of support you will receive in running the business

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