What Is Franchising?

Franchise: A privilege or right officially granted to offer specific products or services under explicit guidelines at a certain location for a declared period of time.

Franchisee: A person or entity to whom the right to conduct a business is granted by the franchisor or licensor.

Franchisor: The company owning/controlling the rights to grant franchises to potential franchisees.

Franchising is a long-term cooperative relationship between two individual companies - a franchisor and one or more franchisees - that is based on an agreement in which the franchisor provides a licensed privilege to the franchisee to do business. The franchisor grants the franchisee the right to use a developed concept, including trademarks and brand names, production, service and marketing methods and the entire business operation model, for a fee.

The product, method or service being marketed is usually identified by the franchisor's brand name, and the holder of the privilege (franchisee) is often given exclusive access to a defined geographical area for a defined period of time.

What's the Difference Between a Business Opportunity and a Franchise?

Franchise
When a franchise is awarded, it establishes a relationship between a seller and a buyer that continues for the duration of the buyer’s involvement in the business. The buyer operates under the franchisor's brand name/trademarks and adheres to a set of guidelines in the operation of the business.

Business Opportunity
With a business opportunity, you buy and own a business outright and operate it under a name you choose. The seller makes his money by delivering the business system, training, equipment, or service method to the buyer. In some cases the seller may also make residual income for the ongoing sale of products or services but for the most part, the relationship is over once the purchase is final.

A Franchise Opportunity Provides:

• UFOC disclosure information
• Brand recognition
• Marketing expertise
• Training program
• Site selection management
• On-going support
• Security of proven processes

A Business Opportunity Provides:

• No on-going royalties
• Usually lower investment
• Company supplied advertising
• Training program
• Site selection assistance
• Freedom to make choices
• Proven system of operation