SMALL businesses struggling to find financial support to expand are being urged to consider franchising their businesses.

The Forum of Private Business (FPB) has teamed up with consultancy Franchise Development Services (FDS), which recently opened a branch in Sunderland, to demystify the subject and provide information for small firms considering this option.

FPB director of finance Nick Palin said: “There is no doubt that the credit crunch has hit certain sectors hard and we are providing as much support as possible to members in that situation.

“But the simple fact remains that there are companies that can expand because they are in markets which are not as susceptible to the credit crunch.”

He said the FPB had linked up with FDS to explain the concept of franchising to small firms because there is still a great deal of misunderstanding surrounding the concept.

The FPB is breaking down the subject – essentially the replication of a proven business idea in different locations with the same name – on its website and via its email newsletter.

Franchising is increasingly being used by successful small firms which have a business concept that can be repeated again and again in different places. The owner – the franchisor – receives money for licensing the brand name and idea, then provides support and advice to the franchisee.

Tony Urwin from FDS said: “The FPB holds a lot of sway with business owners and it’s one of the ways our industry can clarify a lot of the misconceptions about franchising and offer the right information and advice.

“A significant proportion of them could use franchising as a route to expansion, even in the current economic climate.”