Franchise

Franchise

Franchising is a business opportunity that's somewhere between buying an existing business and launching a startup in terms of creativity, independence and risk. A franchisee buys a license from a franchisor to be a dealer of that business model. The owner of the franchise sells a product or service through its franchisees.

In exchange for an initial set-up fee and a monthly payment, the franchisor provides the franchisee a business model, marketing supplies, staff-training assistance, managerial consulting and a pre-existing supply chain. Also, the franchisee benefits from the franchisor's economies of scale, receiving access to prices that a business owner may not otherwise get running a single shop.

There is, in theory, less risk to buying a franchise business than starting a business from scratch because the business model has been tested. Also, as a franchise unit owner, you have a built-in advisory board in the management staff of the umbrella franchise organization. On the downside, you have less creative control over your business as a franchisee than as an independent business owner.

For more information about the top franchises, check out Entrepreneur's Annual Franchise 500 ranking.
 

Today's Most Read

News and Articles About Franchise

Franchise Players: Why Franchisees Have to Be Owners, Accountants, Janitors and Everything in Between
Franchise Players

Franchise Players: Why Franchisees Have to Be Owners, Accountants, Janitors and Everything in Between

Opening a franchise is very different than working in corporate America – and that's a good thing, according to this franchisee.
Kate Taylor
Report: 10 Brands Most Likely to Have Franchisees Default on Their Loans
Franchise

Report: 10 Brands Most Likely to Have Franchisees Default on Their Loans

Looking into buying a franchise? If you're taking out loans, avoid these big-name franchises.
Kate Taylor
Would You Eat Burger King's Black Cheeseburger?
Burger King

Would You Eat Burger King's Black Cheeseburger?

Burger King Japan is rolling out a burger that's treated with bamboo charcoal to give its cheese and buns and unnaturally dark shade.
Kate Taylor
Why Chipotle Won't Franchise
Franchise

Why Chipotle Won't Franchise

The mega-successful burrito chain says it probably won't go the franchising route. Here's why that's a smart move.
Kate Taylor
Franchise Players: I Used All My Money to Buy a Franchise
Franchise Players

Franchise Players: I Used All My Money to Buy a Franchise

Alison Paton invested her life savings to become a Papa John's franchisee 23 years ago.
Kate Taylor
Denny's Just Capitalized on Apple's Tech Glitch in a Genius Marketing Move
Social Media

Denny's Just Capitalized on Apple's Tech Glitch in a Genius Marketing Move

The restaurant chain was quick to latch onto Apple's tech glitch, creating a clever Twitter post that went viral in minutes.
Kate Taylor
Why August Was a Terrible Month for McDonald's
McDonalds

Why August Was a Terrible Month for McDonald's

McDonald's reported a 3.7 percent drop in global sales in August on Tuesday.
Kate Taylor
Why Leeza Gibbons Just Bought a Senior Care Franchise
Franchise

Why Leeza Gibbons Just Bought a Senior Care Franchise

The former talk show host turned to senior care franchising after caring for her mother following her Alzheimer's diagnosis.
Kate Taylor
Franchise Players: How a Newspaper Editor Developed an Entrepreneurial Mindset Through Franchising
Franchise Players

Franchise Players: How a Newspaper Editor Developed an Entrepreneurial Mindset Through Franchising

As the newspaper industry struggled, Chris Meyer decided it was time to take a leap as an entrepreneur.
Kate Taylor
Georgia Dealerships Attack Tesla's Direct Sales Model
Tesla

Georgia Dealerships Attack Tesla's Direct Sales Model

Georgia is the latest state to attack the electric car company for selling cars directly to customers instead of through auto dealerships.
Kate Taylor
Franchise or New Venture? That Depends on You.
Starting a Business

Franchise or New Venture? That Depends on You.

Here are some quick gut checks and questions to ask yourself to determine what path you should embark on.
Rick Bisio
Franchise Players: I Turned My Small Biz Into a Franchised Location
Franchise Players

Franchise Players: I Turned My Small Biz Into a Franchised Location

After two decades in the custom closet business, Truman Jepson converted his small business into a franchised location of Closets by Design.
Kate Taylor
Franchise Players: Entering a Foreign Market Through Franchising
Franchise Players

Franchise Players: Entering a Foreign Market Through Franchising

After 55 years operating in the pharmaceutical business in Mexico, Medix decided to enter the American market as a Medifast franchisee.
Kate Taylor
Fast-Food Workers to Strike in 150 Cities Across the U.S.
Minimum Wage

Fast-Food Workers to Strike in 150 Cities Across the U.S.

Fast-food workers are planning a strike this week that could be the largest yet as the responsibilities of franchisors and franchisees continue to be battled in court.
Kate Taylor