A franchise is a type of license that a (franchised) party acquires to allow access to the knowledge, processes, and trademarks of a company (franchisor) to enable the party to sell a product or provide a service under the business name. 

    In exchange for obtaining the franchise, the franchisee generally pays the franchisor an initial startup fee and annual license fees. Franchising is based on a marketing concept that can be adopted by an organization as a strategy for business development. Once implemented, a franchisor licenses its know-how, procedures, intellectual property, use of its business model, brand, and rights to sell its branded products and services to a franchisee. Franchising is not an equal partnership, mainly due to the franchisor’s preponderance over the franchisee. However, in specific circumstances, such as transparency, favorable legal conditions, financial means, and appropriate market research, franchising can be a successful vector for both the franchisor and the franchisee.

    Types of franchises

    Franchising is a great way to become a small business owner. There are three different types of franchises, from which you can choose, which vary according to your position, your contribution to the business, and the level of involvement of the franchisor. The three types of franchises are commercial format franchise, product distribution franchise, and management franchise. 


    For some individuals, these goals include the desire to start their own business and become the master of their destiny, and the franchise may well fit that image. In a franchise business, the franchisor provides an advanced and developed way of doing ongoing business, consulting, systems, and assistance in exchange for periodic payment of fees and/or purchases. Franchises offer the autonomy of small business ownership, upheld by the benefits of a network of large companies. The search for new goals is a motivating way for you to get out of the economic funk chain. You don’t need business experience to run a franchise; franchisors generally provide the training necessary to run the business model.            

    An Existing Franchise Is A Ready-To-Use Business

    Many entrepreneurs have the skills necessary to run an existing successful business but lack the experience required to start a business, whether obtaining financing or negotiating rental terms.

    Purchasing an existing franchise in a well-designed system can eliminate much of the hard work: choosing a territory, finding a location, negotiating a contract, finding reliable contractors to complete construction on time and budget, establishing relationships with suppliers, etc. You will also be able to start a business with a qualified team already installed. Yet, you still need to do your research – besides the rates transfer, their rates and conditions may differ significantly from the sellers.            

    You Buy A Proven Formula

    When you buy a franchise, you buy a system – a complete method of doing business. Franchises have an established network that you must follow to distribute the franchisor’s products or services using the franchisor’s trademarks or service marks. The franchisor has overcome the pitfalls and created a solid foundation that can be easily deployed. Everything from marketing to products, including site and supplier selection, is approved and ready to be used. Elimination of any inherent assumptions or errors you may encounter. The existence of a proven system eliminates the assumptions and mistakes that an ordinary entrepreneur would typically face. In addition to exercising some control over franchise operations and the franchisee’s adherence to brand guidelines, the franchisor provides the franchisee with leadership and franchise support.            

    Image And Brand Recognition

    What could be superior to beginning a business with a brand that customers already recognize, trust, and love? In the consumer’s mind, the brand often equals reputation. Joining a reputable franchise that has already established a solid brand image, therefore, means that you start with a clientele already familiar with your business and benefit from the knowledge and the experience of a successful brand. If you buy through an established franchise system, the image and brand recognition will already be recognized. Customers are usually more comfortable purchasing items they know and working with companies they already know and trust. In the consumer’s mind, a franchisor’s brand equals the business reputation. Major franchisors want to ensure that their customers are satisfied every time they shop at a franchise store and that the franchisee keeps his brand promise.                   


    In many cases, a franchised company offers comprehensive training and support to start your business. Most franchised companies offer a training program that usually takes place in their offices, in addition to additional training that takes place on the franchise’s website before the official opening. It can also provide you with continued education about your business’s business processes, marketing, and daily operations. The franchise company has developed its preferred way of training its employees so that you do not have to develop the training system. The franchisor will prepare you to manage your franchise in the same way that your other franchised locations are managed. This will allow you to manage your business efficiently and help eliminate the common mistakes that a new business owner typically faces.              

    It is not just in class and in professional training that you receive when you buy a franchise. Most franchisors encourage their franchisees for ideas and share opinions during regularly organized events. This not only allows you to learn from your peers, but you also have the opportunity. You also become part of a franchise network that will be experiencing the same challenges and successes to socialize and network with like-minded company owners.                      

    Minimized Risk  

    For more than two decades, franchising has proven to be a statistically safer way to become the boss. According to the British Franchise Association / NatWest Franchise Survey in 2015, 97% of franchisees reported profitability, while less than 5% of franchise companies closed due to business failure. As a franchisee, you generally have support at all stages of the franchisor who is interested in your success. The famous saying that, with openness, “you are negotiating for yourself, not by yourself.” You are part of a franchise network that you can turn to for help and advice whenever you need it. Statistics also speak for themselves in terms of franchisee satisfaction. Having a wealth of experience behind you dramatically increases your chances of success. With a franchise, you invest in the proven concept and the security of being part of a chain. Although, there is never an assurance of success, having the support of an experienced brand with a proven system can create something short for building a successful business.                            

    You don’t want to take too many risks. The advantages of franchising are that you have the experience of the franchisor and the established franchisees of the system, who can guide and support you. A decent franchisor will offer continuous training and support; no one gives you the keys and expects you to understand that you magically operate a Jiffy Lube. When you buy power and economies of scale in the franchise system, the franchisor can negotiate lower prices for the products and services needed to run its business.                                

     More Freedom And Flexibility

    There are many elements of the franchise business model that you will not control as a franchisee. The items you sell, the amount you charge for them, and the service you provide are all that the franchisor determines. But you run your own business to manage your franchise’s daily operations and start recruiting and managing your employees.    

    You also have power over your work schedule. Being a franchisee requires a lot of work, and sometimes you have to work long hours, but you also have the flexibility to be the boss. Many franchise opportunities allow you to achieve a healthy balance between professional and personal life. You can choose between domestic franchises and companies that can be managed part-time. These franchises can be ideal for entrepreneurs who want to start their own business while they can engage in other personal or professional activities.       

    Marketing Help

    Marketing and advertising can be challenging to understand when you start a business from scratch. When buying a franchise, you get the many years of experience that the franchisee has in marketing the business. You can get involved in proven marketing programs.    

    The franchisor is generally responsible for managing the marketing of the system; these costs are covered by an advertising fund (sometimes called brand funds). Usually, the franchisee also needs to spend a certain amount of local marketing. The franchisor must have a plan to follow, provide graphics and templates for marketing materials, and sometimes have specific suppliers to use. The franchisee has marketing assistance to provide proven tools and strategies to attract and retain customers. Typically, the team helps him develop real marketing plans and budgets for his grand opening, as well as his ongoing efforts to market his company products effectively.

    Business Support

    When you own a franchise, you have access to different types of assistance from the franchisee. The company can offer assistance in processing invoices, payroll, accounts payable, and support for general operations. This is the type of daily assistance that may not be available if you start a business on your own. Another great thing about buying a franchise, in addition to working on your own, is that you receive support from the franchisor that you usually don’t receive from independent companies. Franchisors provide support and training to keep franchisees in shape. They also send field assistance specialists to keep things under control and provide training to turn their franchisees into better entrepreneurs, managers, and leaders. You can seek out business leaders and other owners of your company for advice. And you won’t have to reinvent the wheel or spend a lot of time trying to figure out what will work for your business.              

    Franchisors usually deal with brands, suppliers, advertising, and marketing and bring the purchasing power of an established network. With many franchise systems, you not only have the support of the franchise headquarters, but you can also establish relationships with other franchisees. You can always answer the phone and ask questions of the franchisor or even other franchisees. Established franchisors often also have field staff who can visit your location to provide training and advice, if needed.       

    The Options Are Endless

    There are so many business options when reviewing franchise opportunities and determining what the best franchise opportunity is for you. No matter what your level of investment, your passions, your location, with the right amount of dedicated research, you will surely find a good fit. Restaurants can be a new business for many self-proclaimed gourmets, but they tend to cost more with thin margins. Are you passionate about health and nutrition? Perhaps a massage or fitness franchise looks attractive. If you want to take a break all year round, a seasonal business may be right for you, while a year-round business model is ideal for those looking for more consistent earnings from one month to the next.

    To reap the benefits, with franchise ownership, you don’t have to start with your business, so you can start and grow faster than many independent business owners. Although some self-employed expenses cannot be incurred (i.e., royalties), they are offset by the support, experience, and purchasing power of being part of a larger brand. It is essential to exercise due diligence in exploring franchise opportunities to find the concept that makes you happy to get up and go to work in the morning.         

    It Has Been Tried And Tested.

    Investing in a franchise business model has numerous points of interest, but perhaps none are as important as the fact that you can choose a proven company. The franchisor has already made the mistakes that an independent entrepreneur can make starting with himself. Over time, the franchisor has developed an efficient and robust business model and corrected wrinkles before franchising its business.        

    And you don’t have to take the franchisors word for word. Proof of the viability of the franchise system can be obtained by evaluating the performance of existing franchisees in the network. The franchisor ought to urge you to meet with these franchisees to provide answers to any questions you may have about the opportunity. It is in the franchisor’s interest to ensure that you are fully informed about what it takes to become a franchisee, as this will affect your future success.        

    Consumers are attracted and trust the brands they know. When buying a franchise, you usually buy from a company with a brand that has already been developed, marketed, and, more importantly, familiar to the average consumer. Having a big name associated with your products or services will help you start your business.


    When you look at this list, it not only shows several reasons to think about getting a franchise, but it also shows some of the main challenges you will face if you need to create all of these things in an independent business. You have to pay fees on a franchise that you could avoid in an independent company, but you’re a little like the guy in the Fram Oil Filter ad who says, “You can pay me now or later.” You can pay the fees to the franchisor, or you can spend many expensive mistakes, not learning from the lessons of others who were before you. Using a franchise to achieve your goal of starting a new business is an unusual approach for most people, for all these reasons and more.

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