How Franchising Works

The reason that business franchising was developed and has continued to grow is that it can be a beneficial arrangement for both the franchising company and the buyer of the franchise.

Benefits of Buying a Franchise

Franchising is very much viewed as a dynamic, growing business activity, increasingly accepted and respected by the public, the government, banks and by the business community.

For a person who wants to own and run their own business opting to buy a franchise can limit the risks common place in starting up a new company. With an established brand name and access to set up and marketing advisors, operating a franchise can be ideal for potential small business owners.

Key benefits of choosing to operate a franchise are:-

• Access to a proven business concept
• An operating blueprint which will serve to simplify the process of starting up a new business
• Training in all aspects of running the business
• The use of an established brand name and reputation with a known customer base and the benefit of past marketing campaigns
• Ongoing management support
• Ongoing research and development
• Fellow Franchisees with whom to exchange ideas and experiences
• Collective national marketing
• The strengths of being part of a network.

Benefits of Selling a Franchise

Well known examples of successful franchises include Holiday Inn and KFC. These companies along with many others have shown that using the franchise system can be a good way to grow a business and establish a brand. Franchising allows for rapid expansion while at the same time reducing a proportion of the day-to-day responsibility of running each branch.

Research has shown that opting to franchise a business can be a successful method of achieving long term success. While recent UK DTI figures suggest that between 10 and 20% of all new business start-ups fail within the first year and 50% fail within the first 3 years, the statistics for franchisees are much more comforting. The BFA / NatWest United Kingdom Franchise Survey 2006 found that only 0.9% of all Franchisees suffered commercial failure in 2005.

With strong branding and trademark awareness, franchised businesses are increasingly chosen in preference to the lesser known local independents. Customers like the benefits of a national operation giving local service, effectively providing the combination of both resources.

In summary the key advantages for the seller of the franchise are:

• Provides for faster national expansion of the brand
• Rapid expansion reduces competitors’ abilities
• Acquires local knowledge from Franchisees
• Attracts motivated and dedicated business entrepreneurs
• Eliminates the day-to-day branch responsibility
• Collective national marketing brings improved awareness
• Greater use of trading name improves market share
• Motivation becomes more in-built
• Maintains a uniform service to customers.

Wok2go is a new fast food franchise opportunity unique to the UK. If you would like to learn more about buying a wok2go restaurant franchise simply fill out our enquiry form. Completing this form will place you under no obligation.

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