Franchising

Wikipedia, the free, on-line encyclopedia describes franchising this way:

Franchising refers to the methods of practicing and using another person's business philosophy. The franchisor grants the independent operator the right to distribute its products, techniques, and trademarks for a percentage of gross monthly sales and a royalty fee. Various tangibles and intangibles such as national or international advertising, training, and other support services are commonly made available by the franchisor. Agreements typically last from five to thirty years, with premature cancellations or terminations of most contracts bearing serious consequences for franchisees.

Franchising has been around for many centuries but didn't come to prominence until 1930's, the establishments of electricity, vehicles, and the Interstate highway helped propel modern franchising, most notably franchise-based food service establishments. According to the Small Business Administration approximately 10% of all businesses are franchises.

Go to the Wikipedia article, read the whole thing, and follow the links.

Entrepreneur.com defines franchising as:

A continuing relationship in which a franchisor provides a licensed privilege to the franchisee to do business and offers assistance in organizing, training, merchandising, marketing and managing in return for a monetary consideration. Franchising is a form of business by which the owner (franchisor) of a product, service or method obtains distribution through affiliated dealers (franchisees).

Check this one out, too. It has a good summary as well as some thoughtful questions to ask.

Franchising is worth looking at because the failure rate among franchises is lower than most businesses. That's because many franchises have a pretty good idea of what it takes to make a franchise successful. And you benefit from the experience of the people who run the franchise. Many offer consulting services to help you succeed. They're interest is in your success because they will benefit if you benefit. And you get to taken advantage of a proven business model. After all, they did all the work.

But you have to do your due diligence. You have to be able to work within someone else's framework. And you have to be credit worthy and have a chunk of change to put down and to be able to bear the cost of the franchise fees which can be substantial.

Look on Entrepreneur.com. It's good stuff.

If you're the kind of person who can't work for other people, franchising isn't for you.

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Entrepreneurship informs all of my professional activities. Entrepreneurial ideas are their life's blood. For my ideas on entrepreneurial real estate go to www.yourstopforrealestate.com/blog and for my ideas on writing and publishing, go to www.kearneymusicschoolmurders.blogspot.com.