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Franchise Types The 5 Key Franchise Models

It is said that 20 percent of new businesses fail in the first two years of operation! However, starting a franchise does improve the chances that you will not become part of this statistic.

A franchise comes with an established brand reputation and name. Having a franchise can make it easier for you to get customers immediately. However, there are several different franchise types available and you may be wondering which one is best for you.

If you have been stuck wondering exactly which franchise model you should use, here is a guide that will help you select the right one for you.

Job Franchising

Job franchising does not require a high upfront cost. Many job franchises are often started in people’s homes.

You will have to pay a franchise fee and there may be some start-up costs involved. You may need to buy some equipment and materials to get started.

Depending on the type of franchise you are starting you may also need a vehicle. Great examples of this are a computer repair or a window franchise.

Product Franchising

Another type of franchising that is very popular is product franchising. As the name suggests this type of franchising involves products.

A company will provide its brand name and trademark to an entrepreneur and allow them to distribute its products to a wider audience. This is a popular type of franchising that is often used in the appliance industry, and the computer industry as well.

Business Format Franchising

A business format franchise is one of the most popular types of franchise businesses out there.

The parent company will assist you by giving you a detailed plan of how to operate the business. You will be given training and operational procedure.

They will usually provide ongoing support for your franchise so that you have the highest level of quality control.

Investment Franchising

An investment franchise usually requires that you have a large amount of money upfront. This type of franchising requires that you become an investor in the franchise.

It is done so that the investor can get a large return on their investment but not be fully involved in the business daily. This is how many hotel chains and even large restaurants are run.

Conversion Franchising

Conversion franchising is a kind of franchising in which a franchisee enters into an agreement with a business that already exists. The existing business is converted into a franchise unit.

This is done by giving a business the franchise’s trademarks, marketing systems, and training system. When a business enters into a franchise with a brand that is already popular and successful it can experience exponential growth.

Understanding Franchise Types

As you can see there are several franchise types available. The types of franchises that interest you will largely be dependent on your vision for your business.

Franchising is one of the easiest ways for entrepreneurs to start a business. You will not have to start from scratch, and you will have a framework on which to build.

This makes it easier for you to become successful. If you would like more business tips pieces in the business section of the website.


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