Mc Donald's, Telepizza, The Body Shop, Coronel Tapioca, Dunkin Donuts, H�agen-Dazs, Pans & Company, Wall Street Institute, Levi�s, MRW, Press To and Viajes Marsans are just some of the banners which have made this now fully mature business such a success here in Spain.

The franchise is an attractive business model for small and medium size entrepreneurs who are reluctant to take risks (they are far less prone to failure than traditional businesses) and who wish to concentrate all their efforts on selling

With sixty thousand euros
Generally speaking, the investment required to start up as a franchisee is less than 60 thousand euros in 58% of the cases, while only 15% of this type of business need an outlay of more than 120 thousand euros. In other words, it only takes a little money for an enterprising businessperson to start up in a business which has every chance of being a great success.

The first thing an entrepreneur interested in joining a franchise has to do is choose the business which best suits his or her interests, tastes and ambitions. Once the brand has been chosen (and there are more than 1,000 banners to choose from) everything else is done for you. You don�t have to think up a name for your business, or work at creating a corporate identity. The parent company is responsible for advising the franchisee about the best selling products, where they can be obtained, how to attend the public in the best possible way, where and how to spend money on advertising, how to get trained up, where to go for the cheapest financing, and how to run the business in order to generate the largest profits. All of the above are part of the franchisor�s obligations.

Now for the downside
Alongside all the advantages just mentioned you also need to consider half a dozen drawbacks. You have to pay an initial franchise fee and then a monthly royalty fee to cover the franchisor�s management and advertising costs, which of course you wouldn�t have to pay if you were setting up the business on your own. Then your entrepreneurial creativity is severely restricted, since all matters to do with the running of the business are dictated by the franchisor�s head office, and you will have to receive regular visits from the franchisor�s inspectors.

And if your business starts to make significantly more money than was expected then your royalty fees will go up, though your own business may suffer from a loss of image if your fellow franchisees are not so successful, and you will be powerless to do anything about it. And there are also restrictions on the sale or transfer of the business, which does not happen in the case of traditional enterprises.

A quick and easy business
Even so there are far more advantages than disadvantages in the final balance. Proof of this can be found in the United States where more than half of all retail and service businesses are franchises, compared with a figure of 10% for Spain. In certain sectors (such as fast food, dry cleaning, fashion, courier services and caf�s), franchises clearly dominate the market in Spain.

Franchises are just the thing for those entrepreneurs who want to focus all their efforts on selling. It is a proven fact that a franchisee devotes up to 35% more of his time to sales related activities than an independent trader. Apart from selling the product, the franchisee has only two other major obligations: to make the required investment and to undergo a period of training.

Speed is another of the virtues of the franchise system. On average a franchise business can be set up in two to six months, since everything has been carefully thought out and standardised. The experience of other franchisees constitutes an asset for the entrepreneurs who follow, as all the entrepreneurs who work under the same banner usually reveal the secrets of their success, since they are all in the same boat and need to pull together in the same direction.