The entrepreneurial spirit is an amazing phenomenon. It drives people to seek out a way to be their own boss and manage their own company. These people drive the engine of economic success – small business. Unfortunately, four out of five new businesses fail within five years. On the other hand, 91% of new franchises are profitable. It offers you the chance to own your own business but also provides all the market research and training of an already proven, successful business.

A franchise is a business that is owned by an individual (franchisee) but branded by a major company (franchiser). Start up costs in the United Kingdom range from £25,000 to £250,000. There are on-going managing fees as well. This could be a percentage of profits or inflated costs for supplies with the excess going to the franchiser. This fee covers marketing, training, new product development and specialized management services. The theory behind franchising is to control costs by providing a broad spectrum of goods and/or services from the franchise headquarters. The franchisee must also remember to figure in rent and construction costs.

The franchiser controls the supply chain, attempting to get the best prices for its franchisees. Sometimes this is done with national contracts and some are at the local level. In some cases the franchiser actually makes product for sale in the franchise stores.

Every franchise location is under the direct control of the franchisee. However, when purchasing the franchise, the franchisee agrees that he will be bound by the direction of the franchiser over marketing, quality control and good business practices. Even so, in the beginning be prepared to work long hours, have little help and be jack-of-all trades in your business.

There are three ways to purchase a franchise.

One, directly from a franchiser. Two, with the aid of a broker. A franchise broker can be helpful in that he represents many franchisers and will assist you in selecting a franchise that meets your need. Generally, they are paid a finders fee from the franchiser. One must be careful when using a broker that he does not steer you to the businesses where his take is high. The third way is to buy an already existing franchise. The benefits to this are you will have an opportunity to see the books, get an insiders understanding of how the franchise works and generally have more information to work with than with a startup. On the other hand you may or may not be able to go to training at the franchiser which is a big deficit.

A franchise is an excellent way to enter a business as it offer continuous support. Consumers are generally familiar with a the goods and service of a franchise. Franchises have a 91% success rate versus an independent whose five year survival rate is 20% on average. Franchising is the best of all worlds. You own and operate your business but have significant help from the franchiser.

Author Bio: Find out more information about Franchise Business Opportunities at Smarta

Category: Business
Keywords: franchises, business, opportunities, work