Franchising is a popular method of growing a business with relatively low risk and with a reduced level of capital investment, as it is the franchisee that invests their time and money in developing new outlets for your product or service. However, not every business is suitable for franchising, and those that are will require a considerable amount of planning and research before they can begin recruiting franchisees.



This guide explains the basics of the franchising process and examines how to prepare a business for franchising. It outlines your obligations to franchisees and suggests what should be included in a franchise agreement. It also discusses what makes a successful franchisor and offers advice on where you can find further help and information.


What is a franchise?


A franchise is a licence granted by you (the franchisor) to another business (the franchisee), which entitles the franchisee to operate under your trade name or trade mark in return for payment.



The European Franchise Federation (EFF), in its Code of Ethics for Franchising, offers a further definition of franchising as 'a system of marketing goods, products or services, based on a close and ongoing collaboration between legally and financially separate and independent undertakings'. See www.thebfa.org/codeofethics.asp for further explanation.



A franchise network is an association of independently owned and run businesses, usually selling to the general public a range of products or services developed by an umbrella organisation. Examples of franchises exist on every high street and include all types of business, from international chains of fast food restaurants to regional networks of hairdressers and fitness centre. Check their website and see what their policy and prices are.

Here is the website for you to check: -

www.dunkinfranchising.com

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