We are all familiar with franchises, especially popular ones such as restaurants, stores and hotels. Some people in Utah are well-suited for franchise ownership, especially if they want to own a business, but do not want to purchase an existing one or start one from the ground up. The following is a brief overview of franchising.
What is franchising?
When a person franchises, the owner of the franchise (the franchisor) provides the new business owner (the franchisee) the licensed privilege to do business under the franchises name, and sell the franchise’s products or services. Franchisors may also provide franchising with training, marketing and managing assistance. In exchange, the franchisee will pay the franchisor an initial fee and ongoing royalties.
Advantages of franchising
One of the major advantages of franchising is the permission to use a well-known brand name. Another advantage of franchising is the use of a proven system of operation and trying. Franchisors have perfected operations, meaning that franchisees may not make some of the mistakes startup business owners may make. Because franchisors will perform market research before approving a franchisee, franchisees can feel secure in knowing there is a demand in their area for the franchise’s products or services. The franchisor can also provide franchisees with methods on how to differentiate themselves from competitors.
Seek assistance with your startup
If you are considering purchasing a franchising, you will want to make sure you understand all your rights and options as a potential franchisee. Our firm’s business law website may be a good source of information for entrepreneurs in the American Fork area.