Franchising in Ireland
The term ‘franchising’ has been used to describe many different forms of business relationships, including licensing, distributor agreements and agency arrangements. In its most familiar sense, the term ‘franchise’ has arisen from the development of what is called ‘business format franchising’.
Business format franchising is the granting of a license by one person (the franchisor) to another (the franchisee), which entitles the franchisee to trade as their own business under the brand of the franchisor, following a proven business model. The franchisee also receives a package, comprising all the elements necessary to establish a previously untrained person in the business and to run it with continual assistance on a predetermined basis (including a predetermined agreement length, with renewal options).
Master Franchise Opportunities
If you are a franchise business, operating outside Ireland, and would like to explore establishing your franchise here in Ireland, we would like to hear from you.
We can help you get established here by communicating the master franchise opportunity to our data base of registered prospective franchisees and master franchisees.
Please contact us at +353-1-8134555, or email@example.com
The principle is simple – some companies choose to grow, not by developing in the conventional way but, by granting a franchise license to others to sell their product or service. There are clear advantages to this:
- You don’t have to come up with a new idea – someone else has had it and tested it too!
- Larger, well-established franchise businesses will often have national advertising campaigns and a solid trading name
- Good franchise businesses will offer comprehensive training programmes in sales and, indeed, all business skills
- All franchisors provide an up to date operational guidelines in the form of an operations manual as a reference document for the franchisees.
- Good franchise businesses can also help secure funding for your investment as well as, for example, discounted bulk-purchases for outlets when you are in operation
- If customers are aware that you are running a franchise business, they will understand that you offer the best possible value for money and a consistent quality of service – although you run your ‘own show’, you are part of a much larger organisation
- Good franchisors also provide support to their franchisees and the franchise network on a pre determined basis.
20 Questions to Ask a Franchisor
If you are considering joining a franchise you will need to carry out due diligence before coming to a decision. Any established, reputable franchisor will be ready to answer your questions and introduce you to the rest of their network. Here we take a look at the important questions to ask before making the jump;
- How long have you been in franchising?
- I’d like to get in touch with some current franchisees, can I have an up to date directory of your network and their contact information?
- What is your head office structure like?
- How many franchisee failures have you had?
- How much does your franchise opportunity cost, what does this price include and what capital costs will be incurred in addition to this price?
- How much working capital do I need?
- What will be the gross profit margin and what costs will I incur in arriving at a net profit?
- Can I see a detailed business plan?
- What financing arrangements can you make and what terms for repayment will there be?
- What are your fees?
- Do you take any commission on supplies of goods or materials to a franchisee? Do I have to purchase all or just scheduled items from you? Does this apply to equipment?
- Will I be obliged to maintain a minimum fee or minimum purchase of goods? What happens if I fail to meet this commitment?
- Do you train me? Who pays for my training? Where do I go for training?
- For how long is the franchise granted? What happens at the end of that period?
- Does your contract permit me to sell my business? What restrictions are there affecting my rights to sell the business?
- What will happen if I do not like the franchise business? Upon what basis can I terminate the contract?
- What systems do you have for keeping franchisees in touch with you and each other?
- What advertising and promotional expenditure do you incur? Do I have to contribute to it, if so how much?
- What marketing do you currently carry out at head office?
- What help will I receive in local advertising and promotion?
It is normal to meet with your franchisor several times before making a decision so you will have plenty of time to ask all of these questions. Meeting existing franchisees and asking them about their experiences should also be an important part of your decision making process.
In addition, it is crucial that you receive independent, legal advice on your franchise agreement.