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Buy a franchise

Should I buy a franchise?

Franchises come in all shapes and sizes, some costing tens of thousands or pounds while others require quite small amounts. If you have that lump sum from redundancy or retirement then you have to think very carefully about how much you are willing to risk and how much work you are willing to do to make the business a success.

Advantages and disadvantages of buying a franchise

Should you decide to buy a franchise it can be a quick way to set up your own business without starting from scratch. But it is important to consider the pros and cons.

If you have never run your own business before it can take some of the challenges away as someone else has gone through the hard work of setting up a business, created an identity and put together a handbook which should guide you step by step through the process.

You would still be advised to do your own market research to ensure that what you have to offer is of interest to people in your area.


If you buy a franchise your business is based on a proven idea. You can check how successful other franchisees have before committing yourself. It is essential to talk with other franchisees preferably also visiting them to see how they are operating.

You can use a recognised brand name and trademarks. You would benefit from any advertising or promotion by the owner of the franchise - the 'franchisor'.

The franchisor should give you support which usually includes training, help setting up the business, a handbook telling you how to run the business including the financial side and continuing advice.

You usually have exclusive rights in your territory. The franchisor won't sell any other franchises in the same territory.

You might find that financing the business may be easier. Banks are sometimes more willing to lend money to buy a franchise with a good reputation.

You can benefit from communicating and sharing ideas with, and receiving support from, other franchisees in the network.

A relationship with suppliers should have already been established.


The costs may be higher than you expect. As well as the initial costs of buying the franchise, you pay continuing management service fees and you may have to agree to buy products from the franchisor.

The franchise agreement usually includes constraints on how you can run the business. You might not be able to make changes to suit your local market.

You need to check how big a territory you would have as some franchises are given out to too many people which can dilute profits or lead to bankruptcy.

The franchisor might go bankrupt.

Other franchisees could bring the brand into disrepute, so the recruitment process needs to be thorough. If it seems too easy when you try it then the vetting and reputation of the franchisors may not be as important to the franchisor as it should be.

You may find it difficult to sell your franchise - you can only sell it to someone approved by the franchisor.

All profits (a percentage of sales) are usually shared with the franchisor.

First step

Go to a franchise show which would give you the opportunity to speak to lots of franchisors in one location. It might surprise you how many household names which appear to be one company are actually franchises.

get a professional to look over any contract before you go ahead.

If you enjoyed buy a franchise link to franchise case study to find out how it worked for Kids bee happy.

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