Franchise Information

Where Can You Find Information On Leading Franchise Companies?

We get the word “franchise” from the French words for honesty and freedom. This is a good starting point in understanding the nature of franchising. Operating a franchise is a very liberating experience - 90% of the time, you feel just like a CEO. And a franchise relationship is based on trust and good faith. You are essentially becoming a partner of the parent corporation, and you share mutual goals. Franchising is simply a method of doing business where an established company authorizes their proven methods of doing business to a third party for a fee and a percentage of sales or profits.

The nature of this virtual partnership extends to the agreement, whereby you benefit from the support of the parent company with such perks as advertising and training, and the parent company gets to oversee your operation, which may extend to auditing the books and periodic inspections.

The franchising business model is tried and true. Its roots go as far back as the mid-1800’s, when the Singer sewing machine company leased franchise agreements in order to distribute and provide support for their models. Since then, franchises have boomed until more than 70 industries use it for a business model, including motels, restaurants, retail, and even the computer industry. Revenue from franchised businesses accounts for more than $1 trillion dollars in the US annually.

Franchised businesses come in every shape, size, and variety imaginable. If you love working with children, there’s a day-care franchise. If you’re passionate about arts and crafts, there’s retail arts store franchises. If your talents lie to engineering, there’s maintenance and repair shop franchises. If your sole skill is being a good “people person”, there’s staffing and temp labor agency franchises. And franchised businesses span the scale from large industrial operations to businesses you can run out of your living room. No matter what your skill or field, somebody has a franchise for you.

A whole cottage industry has sprung up around the business of franchising itself. If you are interested in running a franchise, you might first want to visit a franchise broker, who acts as an agent that matches talent up with companies. Franchise consultants can help you assess the viability of the franchising company’s business model and determine the best way to start up. Attorneys specialize in franchises, and can advise you and walk you through the steps. Finally, banks and loan agencies offer special loan package deals to aspiring franchisees, so it’s easy to get set up in business quickly.

Typically, the average franchise purchase starts with an assessment of your abilities to run a business, and an up-front fee. There will be a contract to sign, and an agreement as to each party’s obligations to the other. During the lifetime of the franchise arrangement, you will receive whatever support the parent company provides, report to the parent company such details as your books and status, and you will pay whatever royalties or fees to the parent company they have stipulated. Breaking your end of the contract leads to severe consequences for you, and likewise you have grounds to litigate if the parent company fails to live up to its promise. Don’t forget that you have an out - you can always sell your franchise to someone else! That is, if the buyer meets the equal favor of the parent company as have you.

The bottom line is, franchising is like being an entrepreneur, but with a safety net. With so many business models out there for which franchise opportunities exist, it almost doesn’t make sense to found your own company anymore!