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Buying
a Franchise
One
way of setting up a business is to buy a franchise. This
means that you buy the right to run a business the franchisor
has set up. A few examples of franchises are: McDonalds,
Body Shop and KallKwik. For small businesses, the franchise
tends to be retailing and eating establishments or rendering
a service such as cleaning.
| Advantages |
Disadvantages |
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You
get more help and advice starting up and running the
franchise than you would get on starting your own
business.
You start with a reputation and under a well-known
name.
You get a ready-made product or service that is established.
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You
may be less free to develop in your own way.
You
may have to start fairly big - maybe too big for you
if you have no experience.
You have to pay an ongoing management fee.
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Choosing
a franchise
When
choosing a franchise, use the services of an independent
adviser. Make sure that the franchisor is a member of the
British Franchise Association. Ask your accountant to examine
the forecasts given by the franchisor. Also ask the franchisor
for a copy of the latest accounts for your accountant to
check. Get your solicitor to check the contract thoroughly.
(For a list of accountants and solicitors, check our Business
Directory)
You
can get further information about franchises at the British
Franchise Association, Tel: 01491 578049.
You can also write to the British Franchise Association
for a guide that provides advice on how to evaluate a franchise
and gives you a list of franchisor members.
Buying
a franchise is a popular way of starting a business as most
of the initial start-up problems have been dealt with which
means that you have a greater chance of survival than starting
a business from scratch yourself.
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