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Know the Different Types of Franchise Business Opportunities

May 31, 2008
Now that you have researched into some franchise opportunities you must have a general idea about the types of franchises. There are a few different types of franchises available and although they may seem like a good deal you still must be aware of the pros and cons of each type. Being quite knowledgeable about the types of franchise opportunities will help you make a good choice of which franchise to go into.

Generally franchises can be categorized in two groups. They are known as product and trade name franchising and business format franchising.

Big blue chip companies and industry names in the gas (petroleum), automobile, soft drinks and beverage sectors can usually be found under the product and trade name franchising umbrella. While the big company supplies the merchandise, logo and trademarks, and usually takes responsibility for some or most of the advertising, the franchisee doesn't pay royalties on sales. The franchisee sells the services or products provided by the manufacturer. In general, the franchiser will assist in the set-up and advise on the best locations for the business, and continue supplying goods and things such as vending machines (with all the servicing needed to keep them operating successfully) and whatever else is required to sell products.

As the name implies, business format franchising is a way of operating a business by the services provided to the franchisee. The business model relies on the use of trademarks and logos. With business format franchising, the franchisee will locate a site and the franchise company will handle the design and layout of the business.

Did you know that the color on the walls of a dine-in fast food restaurant dictate how fast people eat their meal? Therefore, due to these studies, the franchisers find it imperative to be involved even at this level of the decision making process. They will also dictate the advertising methods, training and the philosophy or mindset that the employees must possess.

Convenience stores, automobile services, hair salons and so many others in this industry are just a few examples.

The franchisee will pay a fee up-front at start-up and continuing royalties in return for continued assistance of the franchiser.

Acquiring a franchise based solely on the brand name will not guarantee your business instant success. You really need to consider which type of franchise suits your personality and interests. Be aware and choose wisely.
About the Author
Thinking of owning a franchise business? Go to www.infoaboutfranchise.com and learn the benefits of operating a franchise business and other related subjects.
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