Chapter 9

Franchises

It would be lovely if there was a way you could start your own business with a much greater chance of survival than most people. And this is just what is sometimes claimed by the franchising industry.

Clearly, you don’t get something for nothing. The price of choosing the franchised route can be high. It is up to you to weigh up the costs of buying a franchise and the risks of starting from scratch.

Some of the costs are obvious: you may have to pay a lump sum at the outset as well as paying an amount each year to the person selling the franchise. Less obvious is the cost if you buy a franchise in which you have to buy products from the seller’s company at a price determined by it; in this way, you cannot benefit from ...

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