When the coffee, tea and catering giant Bewley's was acquired by Campbell Catering in 1990, the operation only had three outlets which were not company run. Since then, franchising has become a crucial part of the company's expansion strategy.

Out of 52 outlets, more than a third are now franchises where the manager pays fees for the right to trade under the brand name. This policy has made it easier for Campbell Bewley's to expand around the country and abroad to places such as Tokyo.

Franchising is broadly defined as a business method by which the owner of the business (the franchisor) gives investors (the franchisee) the right to operate the business in an agreed manner in return for ongoing fees.

A report by Enterprise Ireland showed how franchising has started to play a wider role. There are now 15 Irish companies operating franchises across the state - the main ones being O'Briens Sandwiches, Abrakebabra and Super Macs.

Ten years ago, the numbers employed in the franchise sector reached around 2,000. By last year that had more than trebled and it is expected that in excess of 16,000 will be employed through franchising by 2003. Franchising produced a turnover of £313 million last year.

However, while this growth is dramatic, the report concluded that "the concept of franchising as a business development method . . . had not been used to any significant extent". The report predicted further expansion and exploitation of the area by Irish entreprenuers.

Some of the well established Irish franchises are in the fast-food area, following trends in the US. However, franchising across the Atlantic is now a booming industry and has spread through all sectors including accommodation, health and entertainment services.

Mr Colin Owens, franchising manager of Campbell Bewley's, explains how the franchisee benefits from investing in a tried and tested business format.

"If the business has been successful to date, that success has a good chance of being replicated in the future," he says. "In addition, the franchisee benefits from the provision of training by the franchisor, the promotional and advertising support it can give and just the technical and practical know how that a long established business can provide."

This technical know-how is contained in the franchisee's bible, the operation manual. This is the blue print for the operation of the franchise and, in the case of Bewley's, contains information on everything from how to make the perfect cup of coffee to how to deal with customer complaints.

There are no guarantees in franchising, says Mr Owens. "It doesn't work for every business and complications can arise when your manual is not strict enough or the franchisee goes their own separate ways.

"There also needs to be a strong evaluation process," he says. This may mean franchisors sending a mystery customer around to check that franchisees are adhering to the operation manual.

McDonald's is the world's largest franchise restaurant operation with more than 23,000 outlets in 111 countries. The chain has had a presence here since 1977 and today there are 40 restaurants employing up to 3,000 people.

The chain lays down stringent requirements and a comprehensive training programme to be followed by all potential franchisees. For example, franchisees must be able to demonstrate a flair for business and strong managerial skills.

They are also expected to become involved in community and charity endeavours and devote nine months without payment to learning the intricacies of running a McDonalds.

This training programme takes place at a McDonald's outlet and covers such issues as team building, people skills and customer enquiries. While the person being trained may end up running their own restaurant, they are still required to learn everything from how to make a Big Mac to the optimum temperature at which to cook french fries.

Providing they successfully complete the course, they are awarded a franchise and all the benefits that it entails.

Like most franchisors, McDonald's provides the franchisee with all the back up and support he or she needs to run a successful business while ensuring that the quality of service and best practice of the company remains intact.

The same is true of Centra and Supervalu, the Irish supermarkets that are part of the Musgrave Group. When they were established in the late seventies, independent retailers realised the benefits of becoming franchisees.

Unlike most franchise agreements, Musgrave charges no fee and the stores remain owned by the retailers who operate them. Musgrave sees the benefits in terms of increased sales by the outlets they supply.

The SuperValu and Centra retailers account for 20 per cent of the national grocery market and for 70 per cent of Musgrave Group sales.

Such a move ensures that the Centra/SuperValu brand name is visible all across the state, while the retailers benefit from the Musgrave Group's expertise in everything from marketing to information technology.

According to Enterprise Ireland, there are advantages and disadvantages for both the franchisee and the franchisor.

The main disadvantage for the franchisee is the possibility of insufficient demand for their chosen product or service, or the chance that the relationship with those who own the brand name or company could deteriorate.

However, the principal advantage for them is an easier route into business, with plenty of back up from the franchisor.

For the franchisor, the arrangement is advantageous, not least because of the low capital investment which guarantees a much higher return. Customer recognition across a wider geographical area can also be achieved.

On the down side, franchising involves something of a loss of control of the business and, should a franchisee come to resent the franchisor's input, relations could be strained.

Whatever the pros and cons, franchising is set to play an increasingly wider role across all sectors in the state. Next week business 2000 will look at the latest developments in staff training practices