To the Filipino entrepreneur about to venture in business, franchising is one of the most attractive options. But before he can make a final decision, he needs to know the basics.

An overview

A franchise is a right to sell a certain set of business goods and services under a known trade name or brand name, provided by a franchisor. The terms and conditions for this are defined in a contract, commonly known as a “franchising agreement”.

Pros

The most obvious advantage of buying a franchise is that you are selling products or offering services already known to the public. Marketing won’t be as hard, as your franchisor already does that for you.

Franchisors also provide trainings that you are often required to attend after buying the franchise. This training passes on the proven tips and techniques in handling the business, to ensure that you have the basic skills to succeed in your business.

You are also given access to a list of other franchisees, making it easier for you to consult them, and ask for advice should you encounter a problem.

Cons

Franchising requires money to invest, so be sure to have not only the money to buy the franchise, but an amount to live on before you open for business as well. You will also need to pay the building’s rent, the amount of which depends on the location of your business. Of course, your franchisor also gets a percentage of your gross sales, apart from limiting your strategies in running the business.

“Should I buy a franchise or not?” This is a question you need to thoroughly think about, before you take another step. Take into consideration its advantages and disadvantages, and assess yourself, and you’ll know whether franchising is the right business for you.