How Franchising Works

Franchising is fundamentally a business system into which an individual or Company invests to become a Franchisee and subsequently uses the business philosophy, know-how, name, system, trademark(s), advertising, and concept of another well or more established business owner (the Franchisor). The franchisee, in return, pays the franchisor a percentage of their turnover or a fixed monthly amount by way of a Management Service Fee and possibly a contribution towards a National Promotions Fund.

The Franchisor in every case has made the business decision to expand their business and their brand with the support of a franchisee network in a type of ‘profit-share arrangement rather than potentially much slower expansion (if any) and being reliant on a more organic business growth and Head Office staff.