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YOUR INVESTMENTS | FRANCHISE 101

Franchise 101

WHAT IS THE DIFFERENCE BETWEEN A BIZ OPP AND FRANCHISE?
Franchising is the practice of using another business’s successful business model. For the franchisor, the franchise is an alternative to building “chain stores” to distribute goods. The franchisor’s success depends on the success of the franchisees. The franchisee is said to have a greater incentive than a direct employee because he or she has a direct stake in the business.

A business opportunity (or biz opp) is the sale or lease of any product, service, equipment, etc. that will allow the purchaser-licensee to begin a business. The licensor (or seller) of a business opportunity usually states that it will acquire or assist the buyer in finding a suitable location or provide the product to the purchaser-licensee. This is different from the sale of an independent business, in which there is no continued relationship required by the seller.

WHAT CAN A FRANCHISE DO FOR ME THAT I CAN’T DO FOR MYSELF?
Purchasing a franchise ensures that you are buying into a functioning and proven business model. There’s a considerably lower rate of failure for franchisees than for entrepreneurs with original business concepts in a start-up business. Additionally, many franchises profit because the items/services they sell already have a name and a reputation behind them.

Franchisors provide bulk purchasing power (much like wholesaling) which you wouldn’t have without the franchise system. Because all of the franchisees in a system contribute to the expense of creating the software, systems, tools, etc., the quality of those resources is superior to resources provided to non-franchised businesses. If one tried to recreate those distributables, the expense would be far more than what one had invested in the franchise fee and the quality would be sub-par.

ARE THERE ANY CURRENT TRENDS IN FRANCHISING?
There are a plethora of trends in the franchise arena. Green businesses are swiftly growing in today’s economy; these franchise concepts focus on energy-reduction services for homes and businesses. Fitness, health and personal care will continue to expand due to childhood obesity problems, baby boomers looking to “get fit” and nutritional programs for those living healthy lifestyles. Recession-proof brands are understandably popular in today’s economy. Many people who buy a franchise concept do so because they’ve been laid-off due to a declining economy. With that in mind, many want to ensure they‘re purchasing a business that won’t be affected by the economy in the event of another recession.
WHAT TYPE OF SUPPORT IS INCLUDED?
This is a very important question for a franchisee to ask. There was a study reported in Franchise Times, conducted by professors at Florida State University and the University of Illinois at Urbana-Champaign; the study surveyed 100 franchise concepts to determine the one factor that made some franchise systems more successful than others. They concluded that the amount of initial and ongoing training was directly proportionate to the success level of the franchisees in the system.

Therefore, we believe that solid and lengthy training programs properly prepare a franchisee for success. There are so many facets to business and it takes more than a week to learn all of them. We encourage prospects to look for franchise systems that have a minimum of two weeks of initial training, a library of past trainings for on-the-job reference and a very strong ongoing coaching and support program. We also encourage franchisees to use the resources available to them because it will make a dramatic difference to your financial success.

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Basics

Are you sick of the 9-5 grind and actively looking for alternatives? Start with the basics of going into business for yourself.

Intermediate

Searching for the right franchise opportunity is like looking for a needle in a haystack. If you want to search smarter, not harder, check out the franchising insights and knowledge to get you there faster.

Advanced

You've decided to explore franchise ownership. Now, making it a reality with tips for vetting, funding and minimising the risk of your franchise investment.

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Assessments

What kind of franchise business will match your skills, experience, passions and even more important...your personality? Answering these questions now, will save you time and grief during your search.

Industry Guides

Learn about the various franchise industry segments, from Home Services to Beauty, and more. With nearly 4000 available franchise opportunities, understanding the pros and cons of the industries is crucial for a successful franchise search.

Events

Having helped hundreds of people get into business ownership through franchising, we are in a unique position to educate prospective franchise investors.

How-To Articles

On our quest to share the best in franchise information, we've developed a series of How-To articles with practical advice to move you forward in your franchise search.

Videos

View our collection of educational franchise videos for large investors and first-time entrepreneurs.

Blog

The FranBlog is a trusted digital publication, providing news and information that entrepreneurs and franchise investors want.

LEARNING CENTER
Basics

Are you sick of the 9-5 grind and actively looking for alternatives? Start with the basics of going into business for yourself.

Intermediate

Searching for the right franchise opportunity is like looking for a needle in a haystack. If you want to search smarter, not harder, check out the franchising insights and knowledge to get you there faster.

Advanced

You've decided to explore franchise ownership. Now, making it a reality with tips for vetting, funding and minimising the risk of your franchise investment.

Help Center

Do you have questions about investing in a franchise? Check out our comprehensive help center for answers. If you don't find what you're looking for, submit a question and our team will get back to you.

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