Buying a franchise

Franchising is a business relationship in which you (the franchisee) pay the owner of a business (the franchisor) for the right to market and distribute their goods or services over a fixed period.

Buying a franchise can be a smart business move. You not only get access to an established brand and product or service, you benefit from a proven operating and marketing system designed to reduce the risks associated with starting your own business. You also receive ongoing training and support to improve your chances of success.

However, buying a franchise can limit the way you do business. Franchisors may place restrictions on what you sell, where you operate and how you do business. They may make business decisions that have a negative effect on your franchise. You need to be careful about the type of franchise you buy, and look to match your own strengths and weaknesses against the different franchises on offer.

This guide provides an overview of buying a franchise. It explains the different types of franchises, things to think about before buying a franchise, the advantages and disadvantages, and your obligations under the Franchising Code of Conduct.

Last reviewed
May 16, 2014

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