OCTOBER 27, 2016

What are the real advantages of franchising? Part two: franchisees

In the first part of this two-part blog,  we looked the very real advantages and tangible benefits that franchising can bring to a business looking to grow its operation.

The franchise industry continues to thrive in the UK. There are lots of benefits for franchisors – Franchising can promote faster geographic growth, greater economies of scale, lower capital outlay and improved brand recognition.

But what’s in it for the franchisee?  If you are a budding entrepreneur interested in the opportunities that a franchise business can present, then read on.  Below we explore the six key advantages that franchising has for franchisees.

Advantages of Franchising:

Ready-made, proven business concept

Perhaps one of the key reasons why becoming a franchisee is such an attractive proposition is because it gives you access to a ready-made business concept.  As long as you seek the right advice and carry out the necessary research to enable you to make a good choice, the fact that you are buying into an already established and proven business concept is a huge plus.

When carrying out your research, bear in mind that a successful franchise should involve products and/or services that are well-developed, know-how that the franchisor has acquired over a period of years, and a brand that customers already recognise and value.

Franchising resilience

Franchising continues to show substantial economic resilience, with the 2015 NatWest Franchising Survey showing that 90% or more of UK franchises have reported profitability, in all but one year since the start of the global recession in 2007/2008.  So, the fact remains that new businesses operated under franchise are statistically far more likely to succeed than those that aren’t.  This will afford you a level of confidence about your new business that you may not have if you were setting up on your own.  It likewise makes franchising a safer lending proposition to banks.


As a franchisee, while you will be obliged to follow your franchisor’s operating methods exactly, and will often have minimum sales targets to achieve, you nevertheless have independence.  You will own your own business, and this in itself can be a powerful attraction for individuals who simply want to be their own boss.


But although franchisees operate independently, they can also benefit and learn from the ongoing support of their franchisor.  Similarly, franchisees should also have access to other franchisees, with whom they can exchange ideas and experiences with. This type of support network can prove to be invaluable.

Shared marketing and promotional spend

Any good business will dedicate time and money to marketing their product or services, so as a franchisee you may be asked to contribute a small percentage of your sales towards a national advertising and marketing fund, managed by your franchisor for the benefit of the franchised network as a whole.  This allows you as a franchisee to benefit from sophisticated marketing campaigns that would otherwise be quite beyond the reach of a sole operator.

The opportunity to realise value

Lastly, an important advantage of becoming a franchisee is that when your business goes well, owning a franchise enables you not just to earn a salary, but also to potentially realise the value in your business, when selling it on at a later date.  And with 90% of UK franchises currently reporting profitability, if this is your business goal it seems reasonable to assume it is attainable.

So, if you are an entrepreneur looking to focus your energies, then becoming a franchisee may well be for you.  With 901 active franchises in the UK, there is a business format to suit every interest and skill.  But take time to thoroughly research the opportunities out there.

And when you are ready to take the plunge, get advice. Goldstein Legal’s franchise experts can help you with everything from franchise agreement reviews to franchise re-sales. Get in touch with us and we can help to ensure you’ve covered off all the legal essentials before you sign on the dotted line, allowing you to embark on your franchise adventure with confidence.

This article was first published on FranchiseExpo.co.uk.  

Photo©John Cassidy The Headshot Guy® www.theheadshotguy.co.uk 07768 401009

Roz Goldstein, Founder, Goldstein Legal

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Goldstein Legal is part of Nexa. Goldstein Legal are members of the British Franchise Association and offer a range of legal services for franchisors and franchisees, regularly advising both businesses and individuals. Contact any of our friendly team for a confidential, no obligation chat to find out how we can help you.
Roz Goldstein

Roz Goldstein


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