A franchise business is a business in which the owners, or franchisers, sell the rights to their business logo and model to third parties, called franchisees. Franchises are an extremely common way of doing business. In fact, it's difficult to drive more than a few blocks in most cities without seeing a franchise business. Examples of well-known franchise business models include McDonalds, holiday inn, FedEx, and burger king. In the United States, there are franchise business opportunities available across a wide variety of industries. To invest in a franchise, the franchisee must first pay an initial fee for the rights to the business, training, and the equipment required by that ...view middle of the document...
Generally, the franchiser will require that the business model stay the same. For example, the franchiser will require the franchisee to use the uniforms, business methods, and signs or logos particular to the business itself. The franchisee should remember that he or she is not just buying the right to sell the franchisers product, but is buying the right to use the successful and tested business process.
The franchisee will also usually have to use the same or similar pricing, in order to keep the advertising streamlined. For example, if you saw an advertisement for buy one get one free from a well-known fast food franchise, you would expect to find this deal in any one of the franchise operations you went into. Aside from using the business model determined by the franchiser, the franchisee will otherwise remain an independent owner of the franchise.
While there are many benefits to investing in an already-successful franchise business model, there are drawbacks as well. As with any investment you make, you should do your research thoroughly before you make any franchise purchasing decisions. If you are considering buying into a franchise, you should contact an experienced franchise attorney for further assistance. As you can see, there are a number of factors to consider when buying a franchise and there is a lot of work to be done. By most accounts, operating a franchise does not guarantee success, but it is still easier and less risky than starting your own business.
Starting a franchise