Delivery Franchises and What They Are

You have probably heard about a franchise.  You may even shop or use a service that is run by a franchise in the United Kingdom.  Franchises are extremely popular in the United Kingdom and have been expanded over the last ten years.  From a business stand point this is good news.  You have more and more options to choose from if you want your own business, but not the headache of starting from scratch.  One type of franchise is the delivery franchise.

A delivery franchise is a company that delivers goods.  It is a service franchise.  Service franchises like the delivery franchises are often low costs options.  When you purchase a delivery franchise you are obtaining the trade name as opposed to a product.  Let’s examine what a franchise is before we get into specifics about the delivery franchise.

A franchise is where you the franchisee purchase the licence or rights to a brand name and the trademark from the franchisor.  You will receive the use of the name, the logo, and the business format.  In a service franchise you are not dealing in product, therefore you are not responsible for the purchase of said product from the franchisor.

However, with a service you may be responsible for renting the space it takes to run the delivery service.  This means you are also paying for the lease on property to the franchisor. 

A delivery franchise is going to have initial costs.  The initial cost will be determined by the amount of help you receive in the set up of the business and the licence agreement.  The franchisor has the option of asking for ongoing payment as well.  The ongoing fees are often a percentage of the deliveries you make.  For example if you make deliveries to a hundred stores and are paid 100 pounds for each delivery you may have to pay the franchisor up to 40 percent of that revenue.  Delivery franchises work in different ways. 

You will want to research the various franchise companies that are in the delivery business to determine which company has the better costs.  Remember that a high initial fee is not something to dismiss, especially if there are no ongoing fees.  You want the initial fee to reflect what the business is worth.  Now if you have a high initial fee and a 40 percent ongoing cost payment to make that is something to stay away from.

The costs are also going to include what the delivery franchise offers in the way of setup and advice.  If the company will be with you from the start helping you set up the offices, getting the right business forms, the operating manual, software for the computers, etc. you can expect a higher fee than a company that just provides the licence.  Most companies offer about six months of advice and help with a new franchise to make sure you have it set up successfully and will be able to handle the business, thereby keeping their name in good standing.