Types of Franchise Business Opportunities

Now that you have researched into some franchise opportunities you must have a general idea about the types of franchises. There are a few different types of franchises available and although they may seem like a good deal you still must be aware of the pros and cons of each type. Being quite knowledgeable about the types of franchise opportunities will help you make a good choice of which franchise to go into.

Generally franchises can be categorized in two groups. They are known as product and trade name franchising and business format franchising.

Big blue chip companies and industry names in the gas (petroleum), automobile, soft drinks and beverage sectors can usually be found under the product and trade name franchising umbrella. While the big company supplies the merchandise, logo and trademarks, and usually takes responsibility for some or most of the advertising, the franchisee doesn't pay royalties on sales. The franchisee sells the services or products provided by the manufacturer. In general, the franchiser will assist in the set-up and advise on the best locations for the business, and continue supplying goods and things such as vending machines (with all the servicing needed to keep them operating successfully) and whatever else is required to sell products.

As the name implies, business format franchising is a way of operating a business by the services provided to the franchisee. The business model relies on the use of trademarks and logos. With business format franchising, the franchisee will locate a site and the franchise company will handle the design and layout of the business.

It is interesting to note that studies have shown that the color on the walls in an eating area of a fast food restaurant will determine how quickly people will finish their meal. Hence, the quicker people eat the more people they can accommodate in a day. Therefore, franchisers are determined to stipulate to the franchisee something as basic as wall color. The franchiser also has a say in the advertising, training and the service/sales philosophy of the employees.

Some great examples of this are automotive services, convenience stores, hair salons and hairdressers, fast food chains, real estate agents and recruitment agencies.

Start up costs and royalties are two fee structures that a franchisee is expected to pay. The royalties are basically a type of commission paid to the franchiser for their constant support and involvement.

Having a little more information about franchise business opportunities will better enable you to choose one that is just right for you. Always keep in mind that a name brand franchise will not automatically bring in the big bucks. There are some franchises that require you to have salesmanship qualities. So, although franchise businesses are considered a good career move be comfortable in your decision and choose wisely.

About the Author

Curious about franchise business opportunities? Check out www.infoaboutfranchise.com and learn the benefits of operating a franchise business and other related subjects.

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