Opening a Franchise Business in Hong Kong

Opening a business from scratch is not easy and new entrepreneurs often consider beginning as a franchisee of a well-known franchise brand. But how exactly does a franchise work? What are the roles of franchisor and the advantages of being a franchisee? Read on if you wish to learn more about the franchise business model.

There are more franchises around us in Hong Kong than you would think - whether it’s the McDonald’s where you grab your breakfast, the 7-Eleven where you get your newspaper and late night snack, or the 24-hour self-service laundromat that you pay your weekly visit. These well-known international or homegrown franchise brands (the franchisor) sell the right to open stores and sell products or services using its brand, expertise and intellectual property. By paying an initial start-up fee, an annual fee and a percentage of the branch’s profits, people who are interested can purchase these rights. These people thus become the franchisee and the branch business they own is called a franchise.:

By becoming a franchisee, you are forming a business partnership with the franchisor through which you can build a business in a fast, low capital way:

在深入了解特許經營加盟的商業運作模式之後，有意成為加盟商開展自己的生意？如果你有此打算，不妨聯絡我們！Lassana接受生意加盟，並且為加盟商提供全面的運營及技術培訓，確保你能擁有最強後盾，在香港飲食業界打下屬於自己的一片天地。

The franchisor has invested its own time and money into creating a successful business system and will provide ongoing support to the franchisee. In return, you, as the franchisee, have to pay a fee for using that brand and operating system.

As a business owner, you are probably thinking of doing this in the long-term and you would like your business to last. Therefore, many franchise agreements last five to 10 years, and terms of 10 to 20 years are not uncommon. While you may prefer a shorter term for your initial agreement, you should make sure your contract lasts long enough for you to recoup your investment.

Apart from the initial franchise fee that you have to pay when you first become the franchisee, there are usually some other ongoing franchise payments that you will have to make to the franchisor within the agreement period. These costs could include monthly or annual fees based on your sales, and costs needed for franchise advertising.

Plans sometimes change and so it’s important to figure out the conditions related to renewal and termination policies before you sign the agreement. These policies determine your ability to choose how long you continue with the franchise and the fee required for early termination and sale of the franchise.

It is almost impossible to separate our lives from franchises, whether we are speaking of renowned international franchise brands or home-grown brands. So, what kind of franchises are there in Hong Kong? According to Hong Kong Franchise Association’s estimates, around 43% of franchises in Hong Kong are in the catering business, 37% in services and 20% in retailing. Some common ones include:

Since the first self-service laundromat opened in Hong Kong in 2014 and there has been a boom since.

To give their children a head start in Hong Kong’s competitive environment, many parents would arrange after-school classes for their kids. If you are passionate about helping children and young people with their studies or developing their creativity, this is perfect for you.

It would be hard to go around Hong Kong without coming across a bubble tea, fast food or coffee franchise. If food and coffee are where your heart is, look no further than Lassana, which has over 8 years of experience growing coffee shops in the competitive catering market in Hong Kong