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If I invest in a franchise, is it my own business?
If you create a company or become a sole trader in order to set up a business that operates under the name of and uses the business system belonging to a franchisor, then that business entity does indeed belong to you and is therefore your own business.What you have to be clear about though is that your business exists solely in order to operate a local outlet of the franchisor’s business and it must always operate in line with all the requirements of the franchisor’s system as laid down in the operations manual. That means you can’t just do what you like when you like, so it may feel a bit less like your business than you thought it might. You will also be forbidden to continue using that system if you abuse it and your business will cease to exist.The advantages of such an arrangement are that you are given access to a proven business system that has previously demonstrated success in a number of places and, provided you follow that system, you should be successful too. If you are not successful then help will be at hand to either get you back on track or help you move out of the network and onto something else. Should any of the other franchisees not be operating properly, they too will be taken to task before they damage the reputation of your business and that of the network as a whole.
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