Available Franchise Opportunities
Buy A Franchise
Business format franchising and product (trademark) franchising are the only two business models generally acknowledged as true franchising formats.
Product or trademark franchising grants the franchisee the rights to sell or distribute products or services under the manufacturer’s brand. Franchisees have the rights to the manufacturer’s corporate identity but receives limited operational support. Although franchisees are obliged to use the corporate identity package, they remain relatively free to operate the business as they see fit. This is an informal or “loose” form of franchising and its popularity is in decline as franchisors move increasingly towards business format franchising.
Business format franchising is by far the most popular and effective franchise format. Because of its formal nature, this format benefits both franchisor and franchisee. Franchisors, under this format, maintain full control over their brand whilst franchisees benefit through a comprehensive blueprint for business success. Franchisees need not develop a new business concept, instead, they benefit from their agreement with a franchisor who has an already established and successful business. In a business format franchise network, the franchisor and franchisees have a common goal, i.e. to dominate the market and to achieve greater profitability. The Practice Business Consultancy subscribes to business format franchising as a mechanism to best empower both franchisor and franchisee.
According to the FASA Franchise Directory, 2010 the franchise industry in South Africa is divided into 15 categories, namely; Automotive Products & Services; Building, Office & home Services; Agriculture, Mining, Manufacturing & Industrial Services; Business to Business Services; Childcare; Education & Training; Entertainment & Leisure Activities; Fast Food & Restaurants – General; Italian Style food; Bakery; Pub Concepts; Health & Body Culture; Personal Services; Real Estate Services; Retailing & Direct Marketing and Social Franchises.
Finance Your Business
The Practice can assist the franchisee or franchisor with the compilation of business plans in order to apply for business loans from financial institutions. The company has working relationships with various financial institutions and can offer professional advice relating to financing. In most instances, prospective franchisees will be required to contribute an unencumbered minimum amount in order to qualify for a loan and for the franchise opportunity. The criteria for qualification may differ from applicant to applicant and it is advisable for future franchisees to start the process with their own bank or a bank that has a track record with the franchisor.
The advantages of buying a franchise:
· An established and well-known brand
· A proven and profitable business concept
· An existing need for the products or services
· Initial and ongoing training
· Initial and ongoing support
· Advice and hand-holding in setting up the business
· Joint advertising and marketing efforts
· Access to joint purchasing
· Growing value in the goodwill of the brand
· Advice and support in the selection of the business location
· Protection of network’s reputation by monitoring product quality and levels of service delivery
Franchisor – the company or individual that owns or controls the trademarks and the franchise systems and grants the rights to operate the franchise using the trademarks, know-how and business systems of the franchisor.
Franchisee – is the company or person who contracts with the franchisor for the right to operate the franchise in return for payment of an initial fee and/or ongoing royalty or management fee.
Franchise – is an arrangement in which a franchisor supplies a trademark, marketing system, and/or manufacturing technique and the right to operate the franchise to independent agents, in return for on-going fees and compensation.
Turnkey Operation – is a franchise in which the franchised unit is completely fitted out, equipped and stocked for the franchisee, ready for opening day.
Initial / Upfront Fee – a one-time fee, which is part of the total investment cost, paid by the franchisee to the franchisor in payment for the right to operate a franchised outlet.
Management Service Fee / Royalty – usually a percentage of turnover, or, less commonly, a fixed fee, payable to the franchisor on a weekly or monthly basis in exchange for ongoing franchisee support.
Advertising Contribution – franchisee’s contribution to the Advertising Fund or Marketing Services Fund operated by the franchisor. This is usually a percentage of turnover or sometimes a fixed fee, payable to the franchisor on a weekly or monthly basis.
Franchise Agreement – a contract which regulates the relationship between franchisor and franchisee and which protects the rights of both parties, as well as the network as a whole. Current legislation such as the Competition Act and the Consumer Protection Act need to be provided for in this document.
Disclosure Document – a comprehensive document, in the form of a prospectus, disclosing all relevant information relating to the franchise proposition. The information must be complete, not in any way misleading, and yet present the business opportunity in an enthusiastic and exciting manner. Prospective franchisees will base their decision whether to buy a franchise on, inter alia, this document.
Operations & Procedures Manual – is a set of documents designed to be a full reference guide to the operations and procedures of the franchise business which will assist the franchisee in its operation of the business.