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Franchisors

Franchising can be an excellent method of expansion for a successful business. With our help, you can turn your business into a national or international network of motivated, owner-managed businesses whilst still protecting and enhancing your brand. Becoming a franchisor can increase your revenue, profits, buying power and brand awareness and can enable you to compete for national customers. Franchising has a high success rate compared to other types of business models, but only when it is done with professional systems, documents and processes. Contact EXB Legal to help you become the next successful international or national brand.

Alternatives to Franchising

For franchisors, franchising can be a powerful, fast and rewarding method of expansion.  However, it is not suitable for every business or for every owner behind the business.  EXB Legal, can help you with alternative structures and we can help you with the planning and documentation and processes if the structure has similarities to franchising.  Please contact us for details and to discuss alternatives if franchising is not for you.

For franchisees, there are also alternatives to becoming a franchisee.

It is worth bearing in mind that the label "franchise" does not have a single meaning.  Often, when people refer to "licensing" it can mean a similar structure, and sometimes franchise structures can be very similar to distributor or agency structures.  The simplest way to work through it is not to be concerned about labels or names, and instead focus on the right structure and system for you.  

Examples of alternatives

Organic Growth - Potential franchisors could expand their business themselves, for example by setting up other outlets and hiring managers. This can mean large levels of investment and therefore greater risk, but you will retain full control and are likely to get higher rewards if the business is successful.

Start-up or employment - For potential franchisees, the main alternatives include employment or starting your own business.  In employment, the risk is lower but the rewards are likely to be lower and the freedom decreased.  Starting your own business can bring greater reward than franchising if successful, but the risks are significantly higher and there will not be training and support and access to a proven system.  

Acquisition - Another alternative for franchisors is to expand by buying other related or competitor-owned businesses.  This could mean even larger levels of investment and raises issues in relation to integration of the businesses, but would mean that you could rapidly expand with a network of established businesses and customers.

Licensing - This if often very similar to franchising, but within licensing or franchising there are many different structures in relation to ongoing fees or royalties, whether or not your brand name is used, what the upfront package or training involves.

Agency - Again, many franchises are similar to agency arrangements.  Where possible, you may want to avoid appointing agents due to the compensation that is payable on termination (it can not be contracted out of).  Generally, an agent acts on your behalf to obtain the customers and orders but it is you who sells to the customer and enters the contract.  The agent takes on lower risk, but often receives less in commission.

Distributor - Some franchises are similar to distributor arrangements.  In a straightforward distributor arrangement, you would sell your products to the distributor at a discount, and the distributor then sells them on to customers, keeping the profit.  The distributor does not usually use your trading name, and takes greater risk so generally the distributor will require more profit margin than an agent.

In each of the above three cases, you can consider exclusive or non-exclusive arrangements (subject to some legal constraints).  Please contact us to discuss your structure and we can advise you to help you to make your choice.