Introduction To Franchising

Franchising is perhaps best described as a partnership between the business to be franchised, the franchisor, and the individual, franchisee.. An individual buys the rights to replicate the business concepts in a specified way over a set period of time. This includes training, support, and marketing. The individual is provided with a tried and tested formula that works. They get a brand, a corporate identity, knowledge and other support to ensure that the business thrives.

The franchisor invests time, money, effort, and knowledge to create a business formula that is capable of being duplicated by others. The franchisor benefits from this agreement by being able to expand to other regions without the need of capital investment.

There are many types of franchises. The investment type is where the owner puts up a large part of the capital to finance a high cost franchise system, e.g. hotels and restaurants. Even though the business owner retains overall management this type of franchise often involves hiring others to manage the business outlets.

When the owner controls numerous areas or manages a team of operatives this is called a management franchise. A typical example would be a van operated organisation run from a depot/hub.

Executive franchises are those run by individuals and are often white collar businesses such as financial consultancies and personnel consultancies. In these case a premises are not important because the business is take to the client.

Retail franchises are typically your high street retail fashion outlet. In these cases the owner invests large sums of money in the commercial property, the equipment, as well as the staff to manage the outlet. Typically the owner is the operator in these cases.


The fifth type of franchise is the sales and distribution franchise. This is where the franchisee is selling or distributing products in a region and possibly where other delivery personnel are employed to cover areas as the customer base expands.


The typical man with a van franchise is called a mobile servicing/job franchise. Examples of this type would be an installation business, repair service such as a mechanic or cleaning service.

If you are looking to make a franchise out of your business you need the advice of a good franchise consultant. A specialist franchise consultant is required to look at the legal nature of the agreement, to examine the marketing package, and to basically help the franchisor build a package that can be reliably setup as a viable business model.

FDS Southern are UK franchise consultants that advize UK and international franchisors.

FDS Southern
Franchise Consultants