About Franchising - Franchise Business Source

About Franchising


Investing in a Franchise is an investment in your future. A dream of many business owners is that it becomes an investment in the future of the next generation.

The Basics

  • Franchising, for the Franchisor, is one of several methods of expanding a business footprint and letting others buy into the success of the brand.
  • For the franchise purchaser – the Franchisee – it’s a contractual agreement to conduct business following the operational processes that helped achieve success and paying fees for the ongoing benefits achieved.
  • Owning a franchise often entails buying specific inventory, using specified technology, or finding a location with the right demographics and foot traffic, among other operational requirements.
  • In exchange for following the processes, you will be entitled to a predetermined level of training (sales, operations, marketing, product), marketing support, sales administration support, site assistance, lease negotiation, etc. Training and support resources vary across Franchises, however you will usually find commonalities within a franchise category.
  • The process of offering a Franchise is regulated by the FTC so if you end up evaluating more than one business, you will quickly see that the Franchise Disclosure Document (“FDD”) follows a strict format with regards to chapter contents. This standardization sets an expectation of information sharing.
  • Each Franchisor has unique success criteria. The franchise discovery process, again unique to each franchise, is structured to help you understand your obligations as an owner and to understand the support you will receive from the Franchising company.
  • They will spend the time you need to feel comfortable to make a decision to invest.
  • The choice to continue through the discovery process always belongs to both you and the Franchisor – it is not an automatic “win” that the Franchisor will award you a franchise business. Likewise, you are under no obligation to a business concept until you sign the agreement.

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