Simply put a franchise is a way of doing business where one person or party, (the franchiser), licenses trademarks, business strategies, and general business methods and tactics to another person, group, or business(the franchisee) for a fee. The terms of this agreement can vary wildly from one business to another but most franchise opportunities usually require a franchise fee to be paid up front and some type of regular yearly or monthly payment to be made. Often the franchisee is also required to pay a percentage of gross sales or gross profits to the franchiser as well.

Theoretically, buying a franchise should provide you a quick and easy way to start a business that has been successful multiple times before. Many of the problems and headaches of starting a business from scratch should be solved for you. The owners of the business concept that is being franchised should have a most of the kinks worked out of the process by the time they are in a position to offer you a franchise opportunity. And the truth is many, many franchises are successful. According to a study conducted by PricewaterhouseCoopers for the IFA Educational Foundation franchised businesses operated over 750,000 establishments and provided over 9,797,000 jobs. Franchises often work well!

It obvious that franchises are often very successful business en devours but they are not risk free. Before you buy any franchise you must seriously consider the investment you are required to make, you must study and know your market, and like any business you start, you must accept the possibility of failing. The financial risks are real. And while as a franchisee you do own your own business you don't always get to call all your own shots. Many franchisers have spent years building their brand name and reputation and they will have a system of business in place you will be expected to follow as a franchisee. Any changes in your business that you might want to make will have to be cleared with the franchiser and you could quite possibly be denied. So, if your ego is large or the pride of building something from scratch is very important to you a franchise may not be the right business opportunity for you.

For the right person, in the right place, at the right time, buying a franchise really can be a great opportunity. However, don't kid yourself into thinking running a franchise is an easy way to riches. Like most any business you open running a franchise will be a lot of hard work.