Franchises
When you’re choosing a business based on research and data, buying a franchise can be an advantageous approach. First, a definition: a franchise is a company you buy into that offers a predesigned system for business. You commonly get to use the company’s trademarked brands and other proprietary materials, and you benefit from its marketing programs, systems of doing business, and ongoing support. In return for all these systems and expertise, you usually pay an initial franchise fee followed by ongoing royalties to the franchisor. Franchisors are licensed and regulated, so there’s some degree of oversight as to how they do business.
There are additional reasons to look into franchising. First, by looking into the various franchises available (and there are thousands), you can get many ideas for businesses in proven markets, whether you choose to do it on your own or buy into a franchise. Second, while a franchise business has its own set of cons, by opening a franchise, you will instantly overcome many of these challenges. For instance, anyone could open his or her own housekeeping service. However, they would do so without the benefit of an established brand, pricing, or any ready-made marketing materials. On the other hand, by buying and opening a Merry Maids franchise, you can present the impression of being part of a large, wellestablished, and trusted business, which could be important for a service that involves strangers roaming around customers’ homes.
CONSIDERING A FRANCHISE
Obvious examples of franchises are companies like McDonald’s and Subway, but there are many lesser-known franchises in countless product or service areas that may interest you. These include everything from cleaning services to staffing firms to retail stores. You’ll also find franchises in hundreds of other categories, including health care, construction, maintenance, and tutoring.
For a list of franchise categories, visit the International Franchise Association site at franchise.org/franchisecategories.aspx.
There are franchises you can start from home too. One note of caution: many home-based “business opportunities” may sound like franchises, but are actually network marketing companies. There are a number of ways to tell the difference. Having been presented with many of these “opportunities” myself, the most obvious hint to me is that, after listening to a pitch for a fair amount of time, I have heard more about the “opportunity” to make money—and how others have made money—than I have about the product or service itself. You see, the success of people in network marketing businesses is generally dependent on getting other people to buy an “opportunity” from you to sell the “opportunity to sell” to others, and so on. The surest way to confirm you are discussing a franchise opportunity versus a network marketing “opportunity” is by simply asking to see the FDD (Franchise Disclosure Document, formerly known as the UFOC). If they don’t have one, it is not a franchise. Note: a network marketing opportunity may also work for you as long as you know that that is what you are getting.
When you’re choosing a business based on research and data, buying a franchise can be an advantageous approach. First, a definition: a franchise is a company you buy into that offers a predesigned system for business. You commonly get to use the company’s trademarked brands and other proprietary materials, and you benefit from its marketing programs, systems of doing business, and ongoing support. In return for all these systems and expertise, you usually pay an initial franchise fee followed by ongoing royalties to the franchisor. Franchisors are licensed and regulated, so there’s some degree of oversight as to how they do business.
There are additional reasons to look into franchising. First, by looking into the various franchises available (and there are thousands), you can get many ideas for businesses in proven markets, whether you choose to do it on your own or buy into a franchise. Second, while a franchise business has its own set of cons, by opening a franchise, you will instantly overcome many of these challenges. For instance, anyone could open his or her own housekeeping service. However, they would do so without the benefit of an established brand, pricing, or any ready-made marketing materials. On the other hand, by buying and opening a Merry Maids franchise, you can present the impression of being part of a large, wellestablished, and trusted business, which could be important for a service that involves strangers roaming around customers’ homes.
CONSIDERING A FRANCHISE
Obvious examples of franchises are companies like McDonald’s and Subway, but there are many lesser-known franchises in countless product or service areas that may interest you. These include everything from cleaning services to staffing firms to retail stores. You’ll also find franchises in hundreds of other categories, including health care, construction, maintenance, and tutoring.
For a list of franchise categories, visit the International Franchise Association site at franchise.org/franchisecategories.aspx.
There are franchises you can start from home too. One note of caution: many home-based “business opportunities” may sound like franchises, but are actually network marketing companies. There are a number of ways to tell the difference. Having been presented with many of these “opportunities” myself, the most obvious hint to me is that, after listening to a pitch for a fair amount of time, I have heard more about the “opportunity” to make money—and how others have made money—than I have about the product or service itself. You see, the success of people in network marketing businesses is generally dependent on getting other people to buy an “opportunity” from you to sell the “opportunity to sell” to others, and so on. The surest way to confirm you are discussing a franchise opportunity versus a network marketing “opportunity” is by simply asking to see the FDD (Franchise Disclosure Document, formerly known as the UFOC). If they don’t have one, it is not a franchise. Note: a network marketing opportunity may also work for you as long as you know that that is what you are getting.
