Franchising 101: a Quick Introduction to the Art of Franchising

Author: clintshaff | Posted: 17.02.2012

The business and financial sectors are very complex parts of modern commerce. These sectors encompass various fields of specialization. People need the assistance of banks and credit unions to deal with money matters, while business enterprises create new ventures and jobs for many people in the workforce.

Common people who work hard to achieve their goals may find the various methods used in the financial and business sectors helpful to achieving their goals. One lucrative business venture people can try out is franchising. This business endeavor refers to a form of marketing and distribution where the franchisor (business owner) grants the franchisee (an individual or a group of people) the authority and right to operate a business. This agreement may sell fast moving goods or provide services under the franchisor’s brand.

Moreover, franchising is described as an assembly of resources and capabilities from various people. The owner of the franchise invests in the prerequisite capital and technical know-how. Investors, to which the authority to make decisions is shared, provides the auxiliary capital. These investors may also provide their expertise and contribute to the viability of the franchise operation.

Many people misunderstand franchising and consider it to be merely a buyer-seller relationship. However, there is more to it than just this. It is a comprehensive and complex relationship between the franchisor, franchisees, the employees, and the end consumers. Also, the interdependence of the various stakeholders means that cooperation and unity are highly essential to success.

Unbeknownst to many, various kinds of franchises for sale exist in the market today. In fact, according to Franchise-Economics.com, there are approximately 900,000 franchise units across the country. These are various stores, locations, and distributorships. Further statistics from the 90s has reported that the franchise industry has had a higher success rate than startup businesses.

Furthermore, single-unit franchises for sale are the most popular and most common type available in the market today. This franchise is purchased from the franchisor by the franchisee, an appointed broker, or a third party sales agent. Single-unit franchises generally refer to single business units located in one physical location. It is already a common practice for franchisors to assign their franchisees to specific locations.

Other great franchises for sale include the multi-unit franchise option. This franchise refers to the franchisee’s authority and right to operate multiple units from the same franchisor or brand. These units can be placed in the same area or in different key locations. Sometimes, the franchisor will even offer additional units to a single-unit franchisee and would offer discounted licensing fees to start-up the business on different lots.



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