So what is franchising? The modern definition is to do with business format franchising and is the licence given by the franchisor to the franchisee to allow them to use their trade mark / trade name and to provide a fundamental guide / package to enable the franchisee to run their business. It also involves an ongoing relationship between the franchisor and franchisee based brand, system, support and the franchise agreement.

Franchising can allow companies to grow and expand much faster and the fact that each business outlet is actually owned by the franchisee normally means that there is often a higher chance that business outlet will be a successful one. However this can also depend upon the franchisor choosing the right franchisees.

There are advantages for the franchisee in choosing franchising as by using a proven system there is a greater chance of success with the network buying power there to help them as well. You also need to remember though that there are initial and continuing fees and you need to comply to network standards. Therefore franchising can appeal more to people who like following a system, rather than those who are entrepreneurial.