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A franchise is the agreement or license between two legally independent parties which gives a person or group of people (franchisee) the right to market a product or service using the trademark or trade name of another business (franchiser).

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Product distribution franchises

Product distribution franchises simply sell the franchiser’s products and are supplier-dealer relationships. In product distribution franchising, the franchiser licenses its trademark and logo to the franchisees but typically does not provide them with an entire system for running their business. The industries where you most often find this type of franchising are soft drinks, automobiles and gasoline.

As a prospective franchisee, before you start looking at specific opportunities and investigate their advantages and disadvantages, you should familiarize yourself with the various franchise models you may come across. These can be broken down by:

industry sector

the franchise development model used by a specific franchiser

the nature and extent of the franchisee’s expected involvement in the business.

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“Owning a franchise allows you to go into business for yourself, but not by yourself.” A franchise provides franchisees with a certain level of independence where they can operate their business. A franchise provides an established product or service which may already enjoy widespread brand-name recognition. This gives the franchisee the benefits of a pre-sold customer base which would ordinarily takes years to establish. A franchise increases your chances of business success because you are associating with proven products and methods. Franchises may offer consumers the attraction of a certain level of quality and consistency because it is mandated by the franchise agreement.

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The franchisee is not completely independent. Franchisees are required to operate their businesses according to the procedures and restrictions set forth by the franchiser in the franchisee agreement. These restrictions usually include the products or services which can be offered, pricing and geographic territory. For some people, this is the most serious disadvantage to becoming a franchisee. In addition to the initial franchise fee, franchisees must pay ongoing royalties and advertising fees. Franchisees must be careful to balance restrictions and support provided by the franchisor with their own ability to manage their business. A damaged, system-wide image can result if other franchisees are performing poorly or the franchisor runs into an unforeseen problem. The term (duration) of a franchise agreement is usually limited and the franchisee may have little or no say about the terms of a termination.

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Some popular franchising opportunities are:

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Some popular franchising opportunities are:

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Fast Food

Service

Restaurants

Building and Construction

Business Services

Retail

Automotive

Retail-Food

Lodging

Maintenance

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Total Investment: $3,695,500 - $13,524,000
Franchise Fee: $65,000
Ongoing Royalty Fee: 6%
Term of Franchise Agreement: 22 years, renewable

The first Hampton Inn opened in Memphis, Tennessee in 1984. Hampton Inn was the first mid-price national hotel chain to begin offering a free continental breakfast and free local phone calls. In 1995, the Hampton brand introduced Hampton Inn & Suites, which consisted of two-room suite hotel rooms with living rooms and kitchen areas. In 1999, Hampton Inn was acquired by Hilton Worldwide, which currently has hotels in 84 countries. Other Hilton Worldwide brands include Waldorf Astoria Hotels & Resorts, Conrad Hotels & Resorts, Hilton Hotels & Resorts, DoubleTree by Hilton, Embassy Suites Hotels, Hilton Garden Inn, Homewood Suites by Hilton, Home2 Suites by Hilton and Hilton Grand Vacations.

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Matt-

I think it is beneficial. I say this because it allows business opportunities for said company and said independent party.

Thomas-

I think franchises are beneficial because franchisees can use a brand that is already proven and advertised, rather than working on creating a community image.

Jonny-

i think that franchising is beneficial because owning a franchise allows you to go into business for yourself, but not by yourself.