What Is a Franchise? Your Questions, Answered
In 2019 there were over 770,000 franchises up and running in the USA. Most of them are fast-food restaurants, with McDonald’s, KFC, and Burger King sitting at the top of the popularity charts.
But what is a franchise, and how does franchising work?
Our short guide below will take you through the main elements of franchising and what you need to do to get started. Read on to learn more about how you can start and run a profitable franchise.
What Is a Franchise?
In simple terms, a franchise is a relationship between a business and someone who wants to run their own business. The franchisor, the original business, will rent out their brand name and business practices to a franchisee.
That franchisee is then free to set up their own business within the limitations of the franchise contract. They will be able to run and keep the business’s profits for themselves once they have paid their franchise fees.
Franchising is a great way to get started in a business with an already successful brand. You are not guaranteed success, but you have a much better chance with a business that already has kudos and is visibility in the public eye.
Acquiring a Franchise
Once you have decided to become a franchisee, you need to look at acquiring a franchise. There are two different models of franchises that you need to understand.
The first is a product distribution franchise. In this type of franchise, you as the franchisee will distribute the franchisor’s products from your store. Usually, this will be on an exclusive basis, in that you will only sell the franchisor’s products and no other competing brands.
The second type is a business franchise model. In this model, you will set up a business along with the guidelines of the franchisor. A good example of this model is a restaurant franchise like McDonald’s.
Once you have decided which franchise model you want to follow, you need to find your franchise through a third-party association. There are lots of agencies that will help you find the right franchise fit for you.
Marketing Your Franchise
Once you have signed on the dotted line, the marketing of your franchise business falls to you. You are responsible for getting the word out about your new business as you would normally.
Firstly, you should have a website for your franchise business. Often the franchisor will help you with this, particularly if there are brand guidelines.
Then you need to think about SEO for franchises. How are you going to get people to look at your business instead of others? A marketing agency can help you stand out from the crowd.
If you are looking to build an online presence for your franchise, you should find out what more an agency can do to get you noticed online.
Succeeding in Your Franchise
So, what is a franchise? A great business opportunity. Hopefully, if you have been wondering how to acquire a business, this short guide has answered some of your questions.
Franchising can be a great way to start your own business with a lot of pre-existing support. Check with the franchising agents and see what opportunities are available on the franchise market today.
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