What is franchising ?

An introductory video Explaining and Presenting the Franchising Process.

Why You Should Consider Franchising Your Business ?

If you own a business which could replicate its success on a national and International scale, developing a franchise could offer the most effective route to capturing the Middle East market and the world at large. Franchising is a proven method of business expansion and offers the following advantages:

            ●   Faster Global Expansion
            ●   Better Motivated Operators
            ●   Get The Edge On Competition
            ●   Rationalises Management
            ●   Local Knowledge From Franchisees
            ●   Group Purchasing Strength
            ●   Effective Quality Controls
            ●   A Dedicated Distribution Network
            ●   Marketing Power

            ●   Improved Profitability

ABC's of Franchising

Phase A: On-site evaluation of client’s business concept meeting objectives:

          ●  Full appreciation of core/related business activities
          ●  Securing data on the entire business method
          ●  Securing relevant financial data
          ●  Brainstorming ideas for possible franchise structure
          ●  Understanding client aims plus management resources
          ●  Securing data for a franchise development programme
          ●  We then undertake the agreed work programme over a three to four week period to generate an action document

Phase B: Preparing the infrastructure

This second phase adheres to a work programme to produce the infrastructure for successful franchise development.

         ●  Intellectual property rights protection
         ●  Identifying support services
         ●  The franchise package
         ●  Preparing financial statements
         ●  Fixing initial and ongoing fee structure
         ●  Production of an attractive franchise prospectus
         ●  Producing the franchise information memorandum
         ●  Producing the franchise manual
         ●  Producing the legal documentation
         ●  Designing franchise owner training programme
         ●   Finalising corporate image elements
         ●  Strategy for franchise owner recruitment
         ●  Procedure for handling franchise owner recruitment

Phase C: Franchise owner recruitment

This involves marketing a franchise to secure quality prospects to own and operate it. Consolidating the first phase of franchise owners is vital to laying the solid foundations for franchising success. 

We would, therefore, stress the importance of allocating the franchise to parties of the right calibre rather than just those with the capital to invest. The key is helping you, the franchisor, to design eye-catching advertising that portrays the opportunity accurately and effectively to attract quality prospects. Having generated enquiries, we then teach your management team how to invest time and patience in handling your enquiries correctly.

Our in-depth industry experience helps clients to avoid the common mistakes at every stage and move on steadily to enjoying the benefits of franchise development success.

Franchising FAQs

Franchising is a method of distributing products or services. At least two levels of people are involved in a franchise system: (1) the franchisor, who lends his trademark or trade name and a business system; and (2) the franchisee, who pays a royalty and often an initial fee for the right to do business under the franchisor's name and system. Technically, the contract binding the two parties is the “franchise,” but that term is often used to mean the actual business that the franchisee operates.

Imagine a store owned by an individual with a particular concept. If the business is successful, the owner may develop a second or third store and hire employees for the day-to-day operations. At that point, if the entrepreneur still wants to expand but prefers not to operate additional stores himself or herself, he or she may decide to “franchise” the store name and business system to an independent business person known as a franchisee. In return, the entrepreneur may ask for an initial fee and/or a continuing royalty payment based on a percentage of that franchisee's sales. The business is now franchised.

It's difficult to tell just by visiting the restaurant. However, if it is a franchise, there should be some signage in the restaurant which indicates that the restaurant is independently owned and operated. Many companies have stores that are operated by franchisees but also have stores that are company owned and operated. So it's entirely possible that of two stores with the same name, one may be operated by a franchisee and the other operated by the company. In either case, the products, services, and quality should be the same.

The answer may surprise you. By 2001, there were 767,483 business establishments in all domestic franchise systems (either owned by franchisors and franchisees), which employed almost 10 million people, with direct output close to $625 billion, and a payroll of $230 billion. These establishments account for significant percentage of all establishments in many important lines of business: 56.3% in quick service restaurants, 18.2% in lodging, 14.2% in retail food, and 13.1% in table/full service restaurants.

Virtually every business form you can imagine. The International Franchise Association now lists more than 75 different categories to describe its members. Typically, you would think of fast food and restaurants first when thinking of franchising, but franchising covers the spectrum from almost A to Z, from advertising/direct mail to construction to dating services to home inspection to security systems to video sales and rentals. Printing and copying services, maid services, computer services, cleaners, lawn care services, real estate, hotels and motels, and travel agencies are excellent examples of successfully applying franchising to established industries.

Investment requirements differ tremendously. It all depends on the industry and the type of business. Total start-up costs can range from $20,000 or less, to over $1,000,000, depending on the franchise selected, and whether it is necessary to own or lease real estate to operate the business. Moreover, the initial franchise fee for most franchisors is between $10,000 and $30,000. Seventy percent of franchisors charge an inital franchise fee of $40,000 or less. The average investment, excluding real estate costs, is between $350,000 -$400,000. You must discuss the inital fees and opening costs with individual companies, although IFA's Franchise Opportunities Guide can supply general information.