The Difference Between Franchise and Subcontracting

Franchising and Subcontracting

When starting out as a Locksmith there are a few different things that you can do to start generating work and gaining more experience as a Locksmith. Often two terms that are discussed are franchising and subcontracting, which can often get confused. Here we describe the difference between the two and the pros and cons of both.


What is a Franchise?

A franchise is when an existing trading brand and business model is copied, through a Franchising Agreement. Within this agreement, the one who would like to use the intellectual property of the existing brand will usually pay fees and agrees to comply with obligations and standards that upkeep the current image of the brand.

For example, Elite Locksmiths is an existing business. Locksmith George would like to use the logo, name, and business model of Elite Locksmiths. An agreement is created that Locksmith George can use the intellectual property of Elite Locksmiths by paying set fees and upholding current standards of the brand.


Owning a Locksmith Franchise

Owning your own franchise gives you the freedom and the flexibility to own your own business but with more security than your own start up. With a recognisable brand and established name, it is easier to build your company and start to generate your own customers, however, keep in mind that you still need to fund the advertising costs to generate leads and are obligated to follow the services and guidelines of the franchise.


Advantages of a Franchise

  • Established brand and image.
  • Independence of a small business with the support of a wider network.
  • Training on how to use the current business model and how to operate successfully.
  • May be easier to secure funding compared to creating your own business.


Disadvantages of a Franchise

  • Bound to meet the obligations of the franchise as set out in the agreement.
  • Less control over running of the business.
  • Restrictions on how to operate, where to operate, the services that you can provide.
  • You are linked to other franchises which can affect your franchise’s reputation.
  • On-going shared profit with the franchisor.
  • No guarantee of renewal at the end of the franchise agreement.
  • Marketing and advertising costs are your responsibility.
  • You will still need your own insurances, tooling, and transport.


What is Subcontracting?

Subcontracting is when an individual undertakes work for a larger company that they themselves can perform but remain responsible for. Subcontractors are not a part of the larger company but rather operate under an agreement with the larger company as a self-employed individual.


Working as a Sub-Contracting Locksmith

If you have just trained to be a Locksmith, joining a sub-contracting network can help you gain experience and confidence whilst you build your own Locksmith brand. Whilst the practical training of Locksmithing can be taught in a couple of days, to be a fully confident Locksmith will take a little while, as you build experience in real life situations and experience situations that cannot be taught within an academy setting.

With that said, sub-contracting gives you the opportunity to go to real-life jobs, understand real situations and interact with customers that helps to build your expertise as a Locksmith. Alongside the numerous benefits, sub-contracting also gives you the support whilst on site that if you get stuck you have the technical support to not only learn on the job but also provide an expert service to customers.


To find out more about subcontracting visit our Working with Keytek® page.


Advantages of Subcontracting

  • Flexible working.
  • Can operate an independent business whilst still taking on subcontracted work.
  • Complete control of services offered.
  • No money needs to be spent on generating sub-contracting work, marketing and promotion is done by the larger company.
  • Support from the larger company
  • Responsibility of job is down to the larger company
  • Can advertise that you work alongside a larger company to boost your independent business.
  • Can work with multiple larger companies for more avenues of work.
  • Can use the jobs given by the larger companies to build experience and confidence if starting in a new industry.


Disadvantages of Subcontracting

  • Will receive only a proportion of the total job from the larger company.
  • You will still need your own insurances, tooling, and transport.