In many fields of business, enterprising people have established a successful business formula and then franchise it. That is, they have done all the groundwork in establishing a sound product and an effective way to sell it.

When you buy a franchise, you need to abide by the established rules which cover everything from the product rights through to staff uniforms. Some of the best known franchises are fast food, convenience stores and car accessories outlets.

Advantages:

• Many of the risks in running your own business is eliminated.
• You are buying a proven system.
• You have back up from experienced people, advertising and marketing support, and all the advantages of a well-known name.
• Training is usually provided.
• There are lower start-up costs.
• You receive the benefit of price concessions from bulk buying.

Disadvantages:

• The capital requirements are considerable, with franchise fees determined by how well-known and successful the business is.
• Your independence is limited as you are required to closely follow established procedures.
• You will be paying part of your income to the franchiser.
• There may be territorial restrictions.
• The Franchise Agreement may be weighted in favor of the franchiser.