The franchisor will have tried the

The franchisor will have tried the product out by piloting it for a reasonable trading period before selling it to potential franchisees. The franchisee is provided with a total package for marketing the product, including tho product’s name and logo, any patented processes, accounting procedures, marketing strategy and training services. The franchisee has to raise capital to pay the franchise fee, find suitable premises, equip them according to the franchisor’s house-style, buy or lease equipment, and market the product to the standard specified by the franchisor. The franchisee is not employed by the franchising company, but has to establish and operate his own business. The fees are to be paid to the franchisor throughout the term of the franchise, usually as a royalty, for example a fixed percentage (typically 10%) of weekly takings.
Advantages
Franchising provides the opportunity of developing business without having large capital sums. For the franchisee it:
a) enables people to go into business with limited risk and outlay,
b) insures that the product or service has been tho¬roughly tested and marketed before the franchise has been approved,
c) provides a well-known brand name and image, and large-scale advertising back-up,
d) requires less capital than other forms of business start-up,
e) provides continuing back-up support and advice during the period of the franchise agreement.