Types Of Franchise Business Opportunities

So you've done a bit of research and you realize that there are many different types of franchise opportunities out there to invest in. Some are attractive, some not so attractive. So if you're contemplating making an investment by affiliating yourself with a franchise, you need to do your homework and research each type of opportunity to protect against an unsuccessful business. You want to invest in a franchise that will do well, and while learning about each type isn't a sure-fire guarantee that you'll make millions in your first year, it certainly won't do any harm.

Although there aren't any hard and fast rules, you can generally categorize any franchise in one of two ways. These two main groups make up most all of the franchise opportunities available to you. The first is known as product and trade name franchising. The second is called 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 franchisor 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.

Business format franchising, as the name suggests, is a method of doing business and involves services provided to the franchisee. The use of trademarks and logos is integral to the concept of business format franchising. Again, the franchisor assists in the selection of a site, and the franchise company will have a hand in the design and layout of the business. When some studies suggest that the colors of the walls and seating in fast food restaurants seem to influence how quickly the customers eat, it's not surprising that franchisors are eager to engage with the franchisee at even this most fundamental level. The franchisor will also be involved in training and advertising, even having a say in the preferred philosophy and mindset of its employees. Some great examples of this are:

-Automotive services

-Convenience stores

-Hair salons and hair dressers

-Fast food chains

-Real estate agents

-Recruitment agencies

The franchisee will pay a fee up-front at start-up and continuing royalties in return for continued assistance of the franchisor.

Whichever type of franchise you feel is best, you have to consider how good a salesperson you are and which area you feel you'd be best suited to. Remember, the popularity of a brand name may not translate into immediate success. Franchising may be a great business opportunity, but you should choose your franchise wisely.