08 Sep, 2017

Franchising A Business

The only way a business will grow is if it makes sales. Franchising a business can increase your sales figure by diversifying your products to new markets. Franchising also means more growth for your enterprise. A franchise is an agreement between a franchisor and franchisee, the franchisee is required to pay a fee since he’s using the franchisers name and methods of operations. There are legal considerations when franchising a business. The agreement must be documented and both parties are required to sign for it to become a binding agreement. The legal document clearly stipulates the terms and conditions that will be adhered to by both parties. Other stipulations include installments, financing and the length of the franchising period. The franchisor also gives the franchisee guidelines on how to conduct marketing and advertising. A franchisee must be very keen and ensure that he doesn’t taint the image of the franchiser by offering sub standard goods or poor services. The franchiser and franchisee are required to read all the terms especially the fine print before signing any documents. A franchise agreement is a delicate contract and the franchisee is required to handle the franchisers details in absolute confidentiality. Franchising a business may mean that you give away your trade secrets and strategies to a franchiser hence its or paramount importance that you chose a franchisee wisely. As a franchiser you be required to handover a manual that outlines how you operate your business. The disclosure document can help a franchisee to asses a franchiser and decide if he wishes to proceed with the contract. The document discloses issues such as size, finances, location, trademarks and patents. Franchising a business has tremendous benefits to both the franchiser and franchisee. The franchiser will receive a percentage of the sales and profits. The franchisee is given a head start by the franchiser since he is allowed to trade under the franchisee’s name and even used similar methods of operation. Franchisee agreements come in handy when a firm wants to go abroad by diversifying their products and services. Choosing a franchiser can be tricky, you should carefully assess the franchisers financial records and how reputable and popular the business is. Ensure that you comply with the law and you follow all the terms stipulated on the contract. A franchise is a very good strategy for growth and expansion.