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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

Is a franchise a safer option than starting your own business?

32 replies

slipperandpjsmum · 22/02/2011 17:31

Does anyone here run a franchise? Do you find you make a good living? What are the pros and cons?

Is a franchise a safer option than starting your own business in the current economic climate?

OP posts:
BeenBeta · 22/02/2011 20:27

slipper - yes some franchisees are undoubtedly happy and some franchises are incredibly successful both for franchisor and franchisee. McDonalds is a famous example.

I have tended to focus on the negatives in my posts because master franchisors will of course want you to be excited and will tend to emphasise only the positives.

The very good thing about the opportunity you are being offered is that you seem to have the pick of the North West area. The most importnat thing you need to work out where and how big the area is that you need to make a sensible profit and you can physically cover. If at all possible you may wish to get te exclusive franchise for the North west and have sub fanchisees working for you as well as running your own part of the area.

ChippingInNeedsCoffee · 22/02/2011 20:41

Shiney :(

Grin
GeneralissimoVonBobbington · 22/02/2011 21:04

"In terms of day to day management I would have control though wouldn't I?? Eg staffing, hours/days I work???

Not even that, necessarily.

ChippingIn and BeenBeta make some excellent points. My husband is a contracts solicitor with a lot of experience dealing with franchises for the franchisee and the franchisor. You can't generalise, you need to look at the franchise information pack and see what sort of commitment they require from you and the degree of control/support you will get. For example, if you run a car hire franchise or a franchise for a well-known fast food outlet, you may be required to have certain (long) opening hours, send your staff to be trained at HO (for which the franchisor may charge), etc etc. You may have to pay the franchisor for your marketing material and take part in money-off promotions even if this loses you money.

You may also find that you are bound into the franchise and have to keep paying the percentage to the franchisee even if your particular franchise fails.

You may need premises (which if you lease may again mean you are bound in even if your franchise has failed).

The key point really is that you need to speak to a specialist franchise lawyer/advisor. Someone else mentioned Business Link - that's an excellent place to start and they will be able to put you in touch with a recommended lawyer. The lawyer will be able to advise on the pros and cons. Remember that you may not be actually free to negotiate the terms of the franchise, but the lawyer can spot things that you may not realise the significance of.

The cost of the lawyer may seem a lot now, but it is very small compared to what you will be paying the franchisor and may well save you a fortune in the long run.

slipperandpjsmum · 23/02/2011 07:26

Thanks everyone for your support. Its been so useful hearing from people who are experienced in this area. Its given me a good idea of where to go for more support and what I need to know - thanks again.

Shine Warthog Wind your necks in and refer to recent threads about being people unsupportive/bullying on this thread - you may recongnise yourselves!!

OP posts:
warthog · 23/02/2011 09:06

eh? i haven't done said things to anyone.

you on the other hand....

cardiganlover · 25/04/2019 09:49

This reply has been deleted

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LEDadjacent · 25/04/2019 09:57

ZOMBIE ALERT!

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