What is the Franchise Business?

The franchise business is basically a licensing system by which the owner (licensor or franchisor) of a product or service licenses others to market his product or service (franchisees) within a defined territory following the guidelines established by the licensor.

There is virtually no product or service that is not available to the consumer through a franchise business.

Many of the finest brand names we know are sold through franchise outlets. In addition to being a widely diversified business, it has been part of the business scene in this country for over 100 years.

Franchising brings in $1 trillion dollars per year with outlets employing over 12 million people. It includes hotels, automotive and repair, business services, cleaning services, restaurants, educational services, health and fitness, senior care, pet care, printing and publishing services, personnel staffing/coaching, retail stores, computer, manufacturing and almost any field you can name.

Operations which are franchised provide a number of benefits such as:

  • Experience
  • Training
  • Start-up assistance
  • Name recognition
  • Purchasing power
  • Proven sales & marketing programs
  • Demographic & site selection
  • Culture of teamwork
  • Tested operating systems
  • Ongoing support
Each of the above advantages combine to form a “safety net” for individuals entering the world of franchised business owners.

Benefits to You as a Franchisee:

  • YOU own an independent business, dealing in a proven and known product or service sold under a national name.
  • YOU can start your own business with limited experience and capital.
  • YOU buy a proven franchise business, so you can achieve a significant return on your investment.
  • YOU will enjoy high prestige in your community.
  • YOU are provided material for local advertising and promotion to supplement national advertising.
  • YOU can save through group buying of supplies, equipment, printing, etc.
  • YOU are given all necessary training.
  • YOU can enroll in an excellent group health insurance plan for you and your family.


What is Involved in Purchasing a Franchise?

  • Business buyers are required to provide a 30% down payment of the total purchase price of the franchise if using SBA financing. Most business or personal service franchises total investment is under $200,000 and 1/3 of all franchises are under $150,000.
  • Prospective buyers often will finance their business purchase utilizing funds from an SBA Backed Loan, Home Equity Line of Credit or 401K (often without incurring any penalties).


For Further Information:

If you are considering purchasing a franchise, you may want to contact FranNet. FranNet is the largest franchise consulting group in North America. FranNet is comprised of franchise consultants that help interested buyers determine if business ownership is right for them. They provide a no-cost consulting service to clients to assist them in determining their lifestyle goals, and then recommend franchise opportunities that can help them to achieve those goals. FranNet's fees are paid for by the franchisors, so services are free to our prospective franchisees.  For more information, visit www.frannet.com.