Franchise Opportunities

The world of business franchises is huge. To make any sense of it in terms of deciding what type of franchise opportunities may work for you, you need to narrow the field down into something you can more easily manage.

To begin with, note that franchises can be grouped into two main types:

• Business Format Franchising
  
• Product and Trade Name Franchising
  

We'll briefly look at these two types of franchise opportunities below.

Business format franchising has to do with services to the franchisees. This type of franchising allows a business to use the trademarks and logos of the franchisor. It also referes to the system of doing business. Issues here include the franchisor helping the franchisee with things like picking a location and site for their business, helping with layout and design, and getting involved with training, marketing, finance, operations, advertising, business management, and all the other things involved in running a business.

Some examples of this type of franchise opportunity are:

• Fast food restaurants
  
• Real estate agents
  
• Automotive services
  
• Convenience stores
  
• Recruitment agencies
  
• Hair salons and hair dressers
  

As the franchisee, you pay the company offering the franchise (the franchisor) an upfront fee plus ongoing royalties in exchange for the use of the company name and logo and all of the ongoing business training and assistance services.

Product and trade name franchising has to do with larger industries and the products and trademarks related to them. Industry examples include automotive, petroleum, and soft drink beverage companies.

Unlike the business format franchise type described earlier, the franchisee does not pay royalty fees to the franchisor. Instead, the franchisor supplies the products along with the company's logo, advertising, and trademarks. In turn, the franchisee sells the products under the logos and trademarks provided.

The franchisor assists with numerous key issues to help the franchisee sell product, things like establishing a location and providing vending machines.