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What you need to know

Research shows that franchising has grown by 48% over the past two years, as more entrepreneurs choose this route to start a business. But few business owners are able to finance fully the purchase of a franchise by means of personal savings. Because franchises cover a variety of industries, start-up costs vary considerably. Then there's also the issue of BEE to consider.

What is franchising?

Franchising is one of the most popular business models in the world today, with its ability to duplicate existing successful small businesses in different locations and with different owners. It is especially popular among entrepreneurs who are going into business for the first time, as there is a considerable amount of training and support available.

Twenty-five questions to ask a franchisor

The following are some questions you might like to ask the franchisor. Please bear in mind that there are many types of franchises and some of the questions may appear to be out of context. We recommend that you draw up your own questionnaire, with the questions tailored to the specific industry you are interested in.

'Every now and then you get a rough ride'

Diego Pitzalis has owned and run a Fego's coffee shop in Rosebank for the past eight years. He shares his experience of franchising with the Mail & Guardian.

When franchises fail

Small businesses have a disproportionately high failure rate in their first three years of operation. While franchises may be less likely to fail, they're certainly not immune. "The three major reasons are: the wrong location, an ill-suited franchisee and an unproven concept," said Anita du Toit of Franchising­ Plus.