Entrepreneurship comes in all shapes and sizes. Whether you choose home-based, online, storefront or combination of any of the above, entrepreneurs have many options for how to define their business. Those options can become more clearly defined when a person chooses franchising.
What is franchising?
According to the SBA, a franchise is a license to use the name, trademark and proprietary products of an existing company. The franchisor receives an upfront fee for the rights to a specific area and royalties based on sales. There are two general types of franchises.
Product or Trade Name Franchising: In general products are manufactured or supplied by the franchisor and delivered to the franchisee to sell. Therefore, focus is on supply chain management.
Business Format Franchising: A full-spectrum business management focus that typically maintains an ongoing relationship between the franchisor and franchisee. Depending on the franchise package, the franchisor offers services on site selection, training, product supply, marketing plans and possibly funding assistance.
To Buy or Not to Buy
The Federal Trade Commission provides a Consumer’s Guide to Buying a Franchise. The 20-page guide includes information about the franchise business model, understanding if franchising is right for you, finding the right opportunity, selecting a franchise, Franchise Disclosure Documents, evaluating potential earnings, and what to know prior to signing a franchise agreement. Additional information about franchising, including a 30-minute introductory course, can be found online through the SBA with information about buying an existing business or franchise, as well as a franchise directory.
The Dallas Public Library also offers materials for check out for those interested in getting another perspective on franchising. Visit our online catalog to search for relevant titles including; Franchise Bible: how to buy a franchise or franchise your own business, How Much can I Make? Actual sales, expenses and/or profits on 83 franchise opportunities and Franchise your business: the guide to employing the greatest growth strategy ever. If you do not live in the City of Dallas, you can still check out up to 5 of our books through your local library. Contact your library and ask about TexShare.