Identify the perfect franchise for you! Take our short quiz Take our free franchise quiz!
Identify the perfect franchise for you! Take our short quiz Take our free franchise quiz!
Identify the perfect franchise for you! Take our short quiz Take our free franchise quiz!

Getting Started - What is a Franchise

Most of you are probably already familiar with franchises. You may even patronize a variety of franchised businesses without realising that they are franchises. These businesses range from car servicing and financial services to yogurt and home repairs. According to the International Franchise Association(IFA) franchises employed nearly 9,000,000 Americans in 2015 and generated nearly $880 billion. Franchising is difficult to escape.

The technical definition falls fairly in line with what we all typically think a franchise is - “an authorization granted by a company to an individual or group enabling them to carry out specified commercial activities”. Basically they are businesses operated by an individual or a group (the franchisee(s)) that shares a common product and/or trade name to the parent company (the franchisor).

But, what you might not know is that there are actually two major types of franchises: product/ trade name franchises and business format franchises. In product and trade name franchises the franchisee (operator of the individual business) has use of a product or trade name, but no supporting relationship with the franchisor (larger company). This means that the franchisee basically operates the business independently, but does benefit from the marketing and advertising efforts of the franchise system. You’ll typically see these types of franchises for products that are older and established with a proven customer base. Some of the most common if these businesses are auto dealerships, gas stations, and soft drink bottling companies. On the other hand business format franchises is a setup that is characterized by an on- going business relationship between franchisor and franchisee. The franchisee is not only offered a trademark and a logo, but also a complete system of doing business. This is the more well known and much faster growing form of franchising, with world famous companies like McDonald’s, Holiday Inn, Century 21, and Baskin-Robbins using this format. This is also the form of franchises that we’ll primarily talk about on FranchiseHelp.

In the best of all worlds, the business format franchise is mutually beneficial for franchisor and franchisee alike. The franchisee typically pays an initial fee and ongoing royalties, giving the franchise system a continuous supply of working capital to develop and expand the organization. In turn, the franchisee gets a business package which would take years to develop and refine, a strengthened ability, to compete through the established brand identity and marketing power of the system, and the cost benefits and clout associated with the franchisor’s collective purchasing power.

What To Negotiate in the Franchise Agreement

Before going into the negotiating aspect, one must always ask the franchisor whether they are willing to negotiate. Usually franchisors state that they have a rigid Franchise Agreement and that it is not open to negotiating. However, there may be some instances where the franchisor may allow some flexibility. Stated below are a few tried and tested tips for negotiating franchise agreements and which areas to concentrate one’s efforts on.

How to Handle the Bad Apple Employees On Your Team

In line with my 3-Ts (Train, Transfer or Terminate) philosophy, let me outline what I feel are some of the key things a prudent manager / leader needs to do to try to turn this sort of worker around.

Franchise Ownership in your 30's

In your 30's, the laundry list of obstacles between you and business ownership has been condensed to the logistical–no longer elongated by lists of personal uncertainties, inadequacies, financial precarities, or lack of support structures. You have honed your skills, established professional connections, and earned credibility as an entrepreneur, each of which has primed you for a successful investment in franchise ownership.