The prospect of running your own business can be both very appealing and somewhat daunting at the same time. That’s why some people start considering franchising. It potentially offers an ideal middle ground. And there are many franchise ownership benefits. You’re the one in charge. You’re responsible for running it and making the key decisions. But you’re also benefiting from the fact that you can build your franchise business with support and training. You’re using a tried and tested framework and are able to draw on the franchisor’s experience to ensure you’re as successful as possible.
But once you’ve decided you’re interested in the idea of franchising, how do you then decide which would be the best franchise to invest in?
There are several different types of franchise
If you haven’t really explored the world of franchising before, you might be surprised by the number of household names that are actually franchises. You might not know there are several different types of franchise too. It can get a little confusing as they can be categorised in different ways based on a number of factors. But these are some of the main ones you’re likely to come across:
- Business format franchises
Business format franchises are often the type many people think of when they hear the word franchise. They’ve sometimes been described as a ‘business in a box’. While that’s a rather simplified description of what a business format franchise actually is, it’s certainly very comprehensive. It’s a clearly defined offering where virtually everything needed to run the entire business is provided by the franchisor. That can typically include training, operations systems, supplier agreements, equipment and sometimes even premises too.
Franchisees are expected to follow a prescriptive approach in terms of the look and feel of what they offer – a lot of fast-food restaurants and coffee shops are business format franchises. Some people might find the lack of flexibility unappealing. But for others it’s an ideal fit, providing a clear framework that gets them up and running quickly with a well-established blueprint for a successful business.
- Product distribution franchises
A product distribution franchise is quite a distinct type of franchise. The franchisor grants the franchisee the right to operate and/or sell the franchisor’s product. But it’s done under the franchisee’s own brand. So the relationship tends to be more distant, with less operational support and guidance provided, than would be the case for most other franchise types. Car dealerships are examples of product distribution franchises. They can be good options for people who are keen to operate very independently and don’t want much franchisor involvement and guidance.
- Management franchises
A management franchise does have some similarities to the business format model. There’s lots of support available in the areas mentioned above like training, marketing and operations.
But one of the main differences is that the franchisee is more involved in its management, rather than with carrying out the day-to-day activities and delivery of the actual services. If you’d like to know more about management franchises, this article might be of interest. And if you’re looking for a stand-out example then look no further as our franchise is based on a management franchise model. If you’re interested in learning more about our franchisees’ experience of running their own branches, take a look here.
Is it better to choose a well-known brand?
The franchising industry has been around for several decades now, and there are quite a few franchise businesses that have existed for a very long time. That longevity is certainly a strength. As is the fact that many of them will have highly recognisable brands with excellent, well-honed operating models and comprehensive training.
But there are many positives about the newer franchises that have emerged over the past decade or so. Even though their franchise offerings are relatively new compared to those that have been around for decades, the companies behind them are often well established with a strong track record. Newer franchises can be more flexible and receptive to your feedback and input. The market can be less saturated too, making it potentially easier to scale up.
Obviously a major part of the decision relates to how much you want to invest financially in your franchise too and newer franchises can be more affordable.
Speak to us…
There are many options in the world of franchising. What’s best for one person won’t be the right choice for another. When it comes to finding the best franchise for you to invest in, what matters most is that it’s best for your unique circumstances and aspirations. So choose an opportunity in a sector that genuinely appeals to you because that will help you stay motivated and focused, even on the more challenging days. If you’re looking for a management franchise with recurring revenue then do get in touch with us to find out more about our franchise opportunity.
