Multi-Unit Franchise Experts

Learn more about owning a franchise and what it takes before you sign-off on a new business.

Franchise Direct

Opening and operating a franchise business is a worthy endeavor that requires careful planning and consideration. There are numerous questions to be answered and hard decisions to be made. To help potential franchisees prepare for the process, the International Franchise Professionals Group (IFPG) has compiled a set of frequently asked questions about franchise management, investment, and education.

This article will cover topics like, how to choose the right franchise, the costs associated with franchising, different types of franchise management models, best practices for franchisor-franchisee relationships, and the importance of continuing education for those starting or operating a franchise.

Choosing The Right Franchise

When selecting a franchise, an investor should research the industry and the company in question to ensure that their investment will generate a positive return on investment. There are several factors to consider when wading through the different types of franchises: Is the franchise product or service in demand? What geographic area does the franchise plan to serve? Who will be the franchise’s customers? Who is the franchisor? What kind of support does the franchisor offer? Is there a sound business plan and financial history?

These initial questions can help guide a potential franchisee in the right direction when they’re considering the different types of franchise opportunities available. When researching an industry, be sure to analyze the trends in news and economic data that support or detract from that industry’s growth over time. Future industry trends can also provide insight into which businesses will be the most successful in that sector. Additionally, it’s important to consider the size of the franchise’s potential market. Additionally, the franchisor should be able to provide proof that they know how to build and sustain a successful business, and be able to show you that their brand is desirable in the marketplace.

Costs of Franchising

When looking at the cost of a franchise, one must not forget that the expenses include more than the initial upfront cost. The following costs must be taken into account when considering whether franchising is right for you:

  • Investment costs, including franchise fees, marketing fees, royalties, and training
  • Legal fees to help with the franchise agreement
  • Operating costs, including rent, salaries, and supplies
  • Research and consulting fees
  • Advertising budget for the launch and ongoing campaigns

The total cost will also vary depending on the size and scope of the business. A small, local franchise may have significantly lower start-up and operating costs than a larger, national franchise.

Different Types of Franchise Management Models

Franchises come in all shapes and sizes, but there are three common models that a potential franchisee should be aware of: single-brand, multi-brand, and vendor of services.

Single-brand franchising refers to a franchisor that licenses their name, system, and brand to a franchisee without any additional brands. For example, McDonald’s is a single-brand franchise.

Multi-brand franchising, or “multi-site franchising,” allows the franchisor to license out more than one brand. As an example, the franchisor may license both McDonald’s and Taco Bell, giving the franchisee the option of operating several different restaurants under the same roof.

Finally, a vendor of services model allows for business ownership that isn’t necessarily restricted to one region or area code. For example, you could operate a cleaning business or franchise that services clients across multiple cities or states.

Franchisor-Franchisee Relationships

The relationship between a franchisor and franchisee is an important one – as it will determine the success of the franchise. Throughout the experience, it’s crucial to remember that the franchisor is the leader with the overall vision and strategy, while the franchisee is the captain of the ship responsible for carrying out the day-to-day operations.

The franchisor should always have the franchisee’s success in mind, whether that is through providing support and resources during setup, or with continuing improvement programs. Franchisors should have clear and straightforward policies when it comes to areas like operations, performance standards, financial obligations, and other conflict management.

A beneficial franchise relationship requires trust and communication. Franchisors should be open and honest with both their franchisors and franchisees, and must value the opinions of their franchisees.

The Importance of Continuing Education

Franchising is an ever-evolving process. With the continued success of an existing business, comes the added responsibility of expanding and keeping up with changing customer demands. This is where ongoing education becomes necessary.

Continuing education can help a franchisor keep up-to-date with the latest advancements, trends, and regulations in the franchise industry. It can also help keep franchisees better informed on the components that are necessary for success. Its important that the franchisor not only provide the resources to growth and development, but also underscores its importance with continued education.

By getting the latest information in the industry, franchisors can better prepare franchisees for the future, empowering them with the skills and knowledge necessary to make sound business decisions and increase profits. Additionally, it helps to foster greater uniformity and consistency, which are fundamental in branding and customer experience.


Franchise Direct,

Franchise Management,

Franchise Investment

Download your free copy!

Explore multi unit franchising opportunities and uncover the mysteries of franchising in this e-book.

And learn to evaluate franchise concepts like an insider.

Request a Franchise Evaluation