Having your own business, following a tried and tested system and being in business for yourself but not by yourself are some of the key motivations for people seeking franchise opportunities.
But after the initial franchise term, what are the options available to franchisees and why would someone want to renew their agreement?
Franchises are designed to give people a proven business system to follow over a specified period of time - usually five years. During this time, most franchisees should have built a successful business and will usually choose to renew if that option is available to them.
In fact, according to the bfa/NatWest Franchise Survey, 71% of franchisees intended to renew. The remainder planned on giving up their franchise for a multitude of reasons including retirement, seeking another franchise opportunity or dissatisfaction with their franchisor.
In most instances, terminating a franchise agreement will mean that the franchisee no longer has the right to operate that business in that location or use any form of branding associated with the franchise. They are left with goodwill and proceeds from the sale of the franchise and assets if applicable.
Unlike most franchises though, Platinum Property Partners (PPP) have the option to leave at the end of their five, 10 or 15 year term while retaining their assets - their entire buy-to-let property portfolio - and their business.
During their time with PPP, they will have built up a significant knowledge and skills base that will enable them to manage or continue to develop their business as they would have with PPP.
So why would Partners choose to renew a franchise agreement and continue to pay a monthly subscription?
For Sukbhir Sing, one of PPP's earliest franchise partners, it provided an opportunity to continue to benefit from all of the knowledge and experience that the network has to offer.
He commented: "It's OK to say that after your initial term you know how to run an HMO (House in Multiple Occupation) and a successful business, but you lose so much more than that by leaving and you're on your own again. You can only benefit from the wealth of knowledge in the network by remaining part of it.
"If I left PPP and there were significant planning or licensing changes for example, what would I do? I probably wouldn't be able to cope as well or alter my strategy if I was on my own. It's back to that insurance and confidence thing - it's more than just me."
David and Rita Brant agree: "Retaining access to up to date information, assistance, and the regular communication with other Partners is invaluable for maintaining the best standards and continuing to develop our business."
Hear more from Andrew Parkinson on why he 'couldn't bear to leave'.
https://www.youtube.com/watch?v=78tFhFWcdqA
