Franchises
When I was 21 I wanted to be a driving instructor. I trained and passed all of the exams and I thought about becoming a sole trader, running my own driving school.
I realised, however, that nobody had ever heard of Mr H's Driving School, so I thought I might not get many customers. I also realised that it would cost me a lot of money to set up my own business, as I would need to buy a car, pay for advertising, pay for the maintenance and insurance on the car, pay for a secretary to book my appointments and so on. It would have cost me a small fortune!
Then I saw an advert to become a Driving Instructor with BSM. I went to see a nice man who told me that they would give me one of their snazzy cars, pay for TV adverts for me, give me some office staff to book appointments for me, pay for all of the car insurance and even give me a brand new car every 6 months. He even said that it would still be my own business, so I could work whatever hours I wanted. Too good to be true, I thought! I'd even be guaranteed customers because BSM are a much bigger name and so people trust them. All BSM wanted in return was £250 per week.
What I had with BSM was a Franchise. I paid them a Royalty Fee every week of £250, so I was called the Franchisee. In return, BSM let me use their name and equipment and provided me with all of the benefits listed above, including extra training when I needed it. BSM were the Franchisor.
There are lots of advantages to taking out a Franchise with a big name brand. People take franchises out with lots of companies, such as Subway, instead of setting up their own sandwich shop. After all, it's much easier to get customers if people have heard of you!
But you have to remember that you will have to pay the Franchise Fee (or Royalty Payment) whether you make a profit or not. When I was a driving instructor some weeks I only made £50, but I still had to pay the royalty payment of £250. Hello mum, hello, can you lend me some money!
The businesses below all let people use their business name and equipment. But they all charge a fee for it, and you can't sell your own products - you can only sell the ones bought from the big name company. You also have to run your business well, because if you mess up your own shop, customers start to think that the whole big name business is rubbish!
I realised, however, that nobody had ever heard of Mr H's Driving School, so I thought I might not get many customers. I also realised that it would cost me a lot of money to set up my own business, as I would need to buy a car, pay for advertising, pay for the maintenance and insurance on the car, pay for a secretary to book my appointments and so on. It would have cost me a small fortune!
Then I saw an advert to become a Driving Instructor with BSM. I went to see a nice man who told me that they would give me one of their snazzy cars, pay for TV adverts for me, give me some office staff to book appointments for me, pay for all of the car insurance and even give me a brand new car every 6 months. He even said that it would still be my own business, so I could work whatever hours I wanted. Too good to be true, I thought! I'd even be guaranteed customers because BSM are a much bigger name and so people trust them. All BSM wanted in return was £250 per week.
What I had with BSM was a Franchise. I paid them a Royalty Fee every week of £250, so I was called the Franchisee. In return, BSM let me use their name and equipment and provided me with all of the benefits listed above, including extra training when I needed it. BSM were the Franchisor.
There are lots of advantages to taking out a Franchise with a big name brand. People take franchises out with lots of companies, such as Subway, instead of setting up their own sandwich shop. After all, it's much easier to get customers if people have heard of you!
But you have to remember that you will have to pay the Franchise Fee (or Royalty Payment) whether you make a profit or not. When I was a driving instructor some weeks I only made £50, but I still had to pay the royalty payment of £250. Hello mum, hello, can you lend me some money!
The businesses below all let people use their business name and equipment. But they all charge a fee for it, and you can't sell your own products - you can only sell the ones bought from the big name company. You also have to run your business well, because if you mess up your own shop, customers start to think that the whole big name business is rubbish!