Phone: 01242 260066 | Email accountants@mitchells.org

Should you buy a franchise?

Mitchells can provide advice to start-ups in the Cheltenham area who are considering buying a franchise.

Franchising is growing in popularity in the UK, and can be a profitable way of doing business. However, there are advantages and disadvantages.

The process involves the licensing of a business 'blueprint' by a franchisor, to a franchisee. The franchisee buys the rights and obligations of the business, using the brand and operating the system provided by the franchisor, while the franchisor retains the overall control.

The benefits

By buying a franchise you can take on a brand which has a successful reputation and working format, thus reducing the risk of failure.

As a franchisee, you will receive initial training in running the business, as well as ongoing support, which might include advertising and promotion, administration services, and product development.

The limitations

The amount of scope to run the business your way will be limited, so you should make sure that you are happy not to have complete free reign over the business management.

You must also consider the costs involved in the venture: for example, you will need to budget for stock, premises, and management service fees.

What you need to do

When considering taking on a franchise, you must consider the structure of the business, and examine its accounts carefully, with professional help, in order to ensure that the business is both viable and financially stable.

You should also do the following:

  • Research the market for your proposed franchise
  • Calculate your projected earnings
  • Find out exactly which kinds of support are being offered by the franchisor
  • Consider any conditions that may be imposed, such as minimum sales levels.

You are strongly advised to take professional advice before entering into a franchising agreement.

If you are a start-up in the Cheltenham area and are considering buying a franchise, contact Mitchells for further advice.

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Contact details

Office: 01242 260066

Company Registration No: 4161638
Company Registered in England and Wales.
Company details
Mitchell Glanville Limited
Registered Address: 41 Rodney Road, Cheltenham, Gloucestershire GL50 1HX

Mitchell Glanville Limited regulated by the Institute of Chartered Accountants in England and Wales If, during the provision of professional services to you, you need advice on investments, we may have to refer you to someone who is authorised by the Financial Conduct Authority, as we are not. However, as we are licensed by the Institute of Chartered Accountants in England and Wales, we may be able to provide certain investment services where these are complementary to or arise out of the professional services we are already providing to you.

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