Buying a franchise can help reduce the risks involved in starting up a new business or working in a new area.
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The benefits of franchising:
- use the proven business system of the company you've acquired the franchise from - the franchisor
- use their know-how and trade using the franchise name, selling their products and/or services, to increase your business success
- receive initial and ongoing support from the franchisor as long as you're trading under their name.
How franchising works:
- you pay an initial franchise or licence fee, which mainly covers the franchisor's costs for setting you up in business
- you make ongoing payments during the period of your franchise agreement. These are either in the form of a management services fee, calculated as a percentage of your turnover, or as a mark-up on the goods/materials that the franchisor sells you
- Franchise agreements usually last for a minimum of five years.
To find out more about buying a franchise click here to access the NatWest Franchise Library containing a series of factsheets and checklists.
Business format franchising is a popular and successful way for companies to expand and for people to start their own business with less risk.
You, the franchisor, grant a licence to your franchisees to operate a business under your name and system to market your products and/or services for a specified period, helping your company to expand.
You get:
- an initial franchise or licence fee for training the franchisee and assisting in the launch of the business
- a share in the success of the business, normally through a management services fee in the form of a percentage of their turnover, or through a mark-up on the goods you supply
To find out more about franchising your business click here to access the NatWest Franchise Library containing a series of helpful factsheets and checklists.
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