Introduction to Franchise

A franchise is an established business format where by the Franchisee (You) licenses a business model from a franchisor(The business Owner e.g. Mc Donald’s). Plain English if you don’t have a business idea or you don’t want to go through the process of starting a business from scratch with untested model or process you might be interested in buying into an existing business with time tested process and guaranteed of getting support and training from the owner of the business (Franchisor).

There are different types of franchise;

Agency franchising Here the franchisee sells under the name of the Franchisor

Dealership / Distributorship Here the franchisee sells the franchisor’s products under the franchisor’s name.
With a franchise the risk of business start up is minimized and it is safer as the business is ready made and its processes are time tested. The likely hood of making profit quickly is also there.

To operate a franchise there is always an upfront fee to be paid which is not always cheap as you are practically buying a business off the self. A certain amount is paid monthly to the franchisor and in return you benefit from training and support. The down side of a franchise is you are not allowed to run the business out side the scope of the signed agreement. You are at a risk if the franchisor goes out of business and is acquired by a new owner whose business sense or operation might be different. Before buying into a franchise, it would be wise to a carry out a proper research on the profitability of the franchise in your proposed location and check out the support that will be provided. Franchising is not yet a well established platform in Nigeria though there are quite a few franchises to choose from. Before you sign any agreement check with an accountant and a lawyer.

This is to your success.