If you have spent any time researching the franchise opportunities, you have probably seen that there are many different types out there for you to consider. If you are thinking of starting your own business by investing in a franchise, you should learn about these different opportunities. What kind of opportunities are we talking about here?
Well, for one there are two main areas of franchises. Most all franchise opportunities will fall under two main categories: business format franchising or product and trade name franchising.
Business format franchising refers to services to the franchisees. For example, business format franchising would be the use of trademarks and logos. It also involves the system of doing business. With this, the franchise would help the franchisee with selecting a site, layout and design, as well as training, advertising and things such as that. Some great examples of this are:
• Fast food restaurants
• Real estate agents
• Automotive services
• Convenience stores
• Recruitment agencies
• Hair salons and hair dressers
With these types of franchises, the franchisee with pay an up-front fee as well as continuing royalties to the franchise owner for the use of the name and logo as well as continuing assistance with the franchise system.
Product and trade name franchising usually refers to bigger industries such as automotive, petroleum and even soft drink companies. This type works a bit differently than the first type. There are no royalty fees with this one but the franchiser will supply the product as well as the logo, advertising and trademarks. The franchisee will then sell the goods or services that are supplied by the franchiser.
The franchiser will help the franchisee with things such as setting up a location, vending machines and other things that the franchisee will need to help them sell the product or service.
Your success in either of these types of franchises will depend on different factors such as your ability to sell the product as well as which type of franchise you select. A franchise can be a great way to start your own business but remember that just because you select a popular franchise is not a guarantee that you will be successful. You have to put your own work into it as well.