Franchising has been the talk of the last century and there have been no signs of it slowing down. The upturn in America's fortunes since the 1930s has been attributed largely to the proliferation of small businesses in the form of franchises. Everyone knows that it is a good way to start a business, especially if you do not have the required "know how" and have never run a business yourself.

So how exactly does franchising work? Franchising provides you with all the tools you need to start up your own business. Everything from uniforms, to Standard Operating Procedures and advertising is done centrally franchisor, in other words, the company that you would buy a franchise from.

So what are the benefits and risks involved with opening up a franchise? If you look at it from one angle, you are starting up a business that has been proven to work elsewhere, a strong brand name, training, on going support, buying power to name a few.

The downsides however, are manifold. High startup cost, royalty fees, advertising fees, inflated prices on supplies, very limited control. The fact that you have to consult with the franchisor over every little change you would want to make (to tailor your franchise to it's particular area) is a tedious process and can result in lost revenue. If you go belly under because of a few bad weeks or months, then you are personally responsible for the debts. There are absolutely no guarantees of success, even with the most successful chains.

It's not easy to be a franchisee because of the fact that you are basically turning over so much money to someone else. Also, if you are able to source cheaper uniforms - you will not be allowed to do it simply because everything needs to go through head office. It's not for nothing that a prominent law website recently published Top 10 reason why not to buy into a franchise. Google it.