Most new franchisees do not need prior expertise in the industry. As part of their franchise package they buy the franchisor's knowledge, expertise and support system. There should already be a high profile and a strong brand in the marketplace or at the very least a commitment to establish it. For franchisors, a franchise system presents an opportunity to establish a network of outlets without having to produce the start-up capital themselves. Most franchises require the payment of ongoing royalties based on turnover, and payments towards national advertising.
Some franchises are substantial and the franchisee receives a good deal in return for the payments.
Others are wafer thin, with the franchisee often buying little more than the right to use a name. Anyone purchasing a franchise needs to be very clear about what they are receiving in return for their fee. Another issue worth close scrutiny is any promise of a guaranteed income and any profit projections. Franchisors should not promise what they cannot deliver and franchisees need to establish to their own satisfaction how realistic the figures quoted to them actually are. Ultimately, whether a franchise is successful will depend on the combined efforts of the franchisor and the franchisee.