Facts about Recruitment Franchises

In franchising there are different types of businesses.  You have service and product businesses such as restaurants, photography, travel, plumbing, and security franchises.  You also have recruitment franchises.

Recruitment franchises are when you have a recruitment business.  Typically you are the business looking for employees for other businesses.  Before we get into an in depth look at the pros and cons of recruitment franchises we should explain what a franchise is.

A franchise is a brand name package deal in which you get the means and support for running the business under certain guidelines.  The business you buy into is already established with consumers.  There is a start up fee for the business and with recruitment franchises you may not need to pay out royalties.  Some franchises can charge £10,000 for the upfront fee; however, recruitment franchises are usually between £3,000 and £10,000.

With a franchise you get items to help you set it up.  This could be the software you need, business model, manuals, etc.  You are the franchisee in the set up and the person offering the franchise is the franchisor.  Basically in a recruitment setting you do not have to build your business from scratch if it is a franchise.  There are strict rules for certain practices like how your business cards can look or the office layout. 

There are pros to buying a recruitment franchise.  You have a recognisable brand name and you do not have to begin from scratch.  The franchisor will help you with the practical details and set up like the website, paper, and corporate templates.  You can also ask advice and get help from the franchisor when you need it. 

Unfortunately with any business even in a recruitment franchise there are downsides. In a franchise you are not exactly your own boss.  While you run the franchise it is the franchisor that sets the rules.  They will tell you how to market your business, what you can do, and how to set it up.  While you are in charge of the financial health of the business you still share profit. 

The royalty fee you may have to pay in a recruitment franchise is anywhere from 10 to 40 percent.  This cuts down on the profits you get to take home.  With a recruitment agency you are placing employees in other companies.  The franchisor expects to get a little bit of the placement fee from you.  If you want 100 percent of the profits a recruitment franchise is not going to work for you.

In some cases the franchisor may drop their support.  After a few months they may not be around to answer questions or feel that they should.  This is why you need to research the recruitment franchise you wish to be in.  By doing this you can find the company that best fits your needs.  You can also find a franchise that may not take as much of your profits as another recruitment franchise.  So make sure you research your options regarding an employment agency franchise.