relationship. Management service fees can be a fixed monthly fee or a percentage of your profit. The latter means that your fees will be lower in the beginning when the business is being established. Some franchisees struggle with the concept that the franchisor will receive a higher fee later in the relationship when less support is needed; it is important to consider the support the franchisor provides at the beginning of the relationship to help build the business and they are only receiving reimbursement during this later stage.
Franchising is also looked upon favourably
by banks, with many hosting specialist franchise units that are able to lend up to 70 per cent of the initial franchisee fee (upon successful application and completion of a risk assessment). This puts prospective franchisees in a favourable position financially and can be another reason that so many people are turning to franchising as an option for building their own business. If these benefits of franchising have piqued your interest, there are a host of online resources
available on the British Franchise Association website, thebfa.org, to help you make sure you are picking the right franchise for you. n
The British Franchise Association (bfa) has been the voluntary self-regulatory body for the UK franchise sector for 40 years. Franchise businesses must pass a standards-based accreditation before they can become a bfa member.
