• Businesses that could benefit from factoring
• Franchising is the least risky way of getting into your own business
• Surveys show that around 60% of non-franchising start-up businesses will fail in their first year of operation
• Only 4% of franchise operations fail in their first year
• In the long term, franchise businesses fare better than non-franchise businesses
• 10 years on, more than 90% of non-franchise businesses will have failed
• Only 10% of franchised businesses will fail in the first 10 years

• The person who is granted the franchise is known as the franchisee (You)
• The franchisee pays a lump sum and ongoing royalties to get the franchise (You foot the bill)
• The franchise Operations Manual will list the agreed standards and procedures for the franchise
• The franchisee is required to carry on the business according to these agreed standards/procedures
• Standards/procedures cover the marketing, business or technical plans or systems of the franchisor
• The franchise agreement should also specify the marketing, business and technical assistance the franchisor is required to give the franchisee

• A franchise is a ready-made business package
• It normally comes with a tried and proven operating format
• A loyal customer base is often already established
• Your initial capital outlay for the establishment of the outlet should be minimised
• The franchisor will generally provide you with training and support systems
• Prior industry experience isn't a prerequisite
• The cost of advertising and other marketing activities is shared amongst all franchise owners, allowing maximum exposure at a reduced individual price
• The franchisor can negotiate reduced prices due to bulk purchases
• The franchisor will generally continue to research and develop new products and/or enhancements to existing products
• Good quality control by the franchisor should result in greater customer satisfaction

• You have to conform to certain business practices and controls
• You will have to pay the franchisor a fee or royalty – sometimes this fees are high and return on investment is not always guaranteed depending on the franchisor chosen but on the other hand, banks are more willing to grant loans to franchise business (trial and tested) than that of new ideas type businesses
• The success of your business depends (to a certain extent) on the success of the franchisor
• If the franchisor experiences financial difficulties, or fails, your business may also fail (through no fault of your own)
• Because of the structured nature of a franchise, it is often impossible for you to select your preferred suppliers or even control the marketing of your own outlet
• There may be territorial restrictions meaning you can only operate in certain areas only, it will be a better idea to choose to franchise in areas where perhaps the franchisor did not exploit yet and the market is ripe.
• There are restrictions on your ability to sell or reassign your own outlet
• The Franchise Agreement may be weighted in favour of the franchisor

• Am I prepared to run the risk of starting my own business?
• Can I accept guidance and direction?
• Can I give total commitment to a product or service in which I might see minor flaws?
• Can I accept that part of my profits will have to be paid to the franchisor?
• Will I resent providing sales statistics and other documents relating to my operation to the franchisor?
• Will I object to the franchisor visiting my premises and checking the equipment and quality of the product or service?
• Will I be diligent in following the franchisor's Operations Manual?
• Will I readily accept that I may have to purchase all my stocks from the franchisor, even though I believe I might be able to source a better deal with another supplier?
• Can I accept the fact that my franchise agreement is for a fixed term, with an option of renewal for a further fixed term?

• Decide what sort of business you would be comfortable in and how much you can afford to invest in it.
• Evaluate a specific franchisor whose business system appeals to you.

• Major newspapers
• Small business magazines
• Franchise Book of Southern Africa
• Franchise Association of Southern Africa (FASA)
  

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