Multi-Unit Franchise Experts

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Beginner’s Guide to Understanding Franchise Opportunities

Thinking of investing in a franchise? You’re in luck! Franchises can provide excellent opportunities for recently retired individuals to stay active and engaged in the business world. But, as with any business venture, it’s best to start off with some information on exactly what franchises are, how to choose a good fit, and what you need to know before jumping into the world of franchising. The International Franchise Professionals Group (IFPG) is here to help guide you through the entire process.

For starters, franchises are business models that essentially permit a company (the franchisor) to provide a regulated and somewhat uniform set of products and services as well as brand marketing through individual franchise operations (the franchisee). The franchisor essentially grants the franchisee the right to use its brand name and resources, while the franchisee owns and operates the individual business itself.

The most common type of franchise is a franchises that sells products and services that are supplied by the franchisor. These businesses sell food items, clothing, home décor, and more under a specific brand name. Some franchise businesses are also service based, meaning they provide a service to customers for a fee. This might include a home repair franchise, a massage franchise, a home cleaning franchise, and more.

It is important to understand that the level of control the franchisor reserves over the franchisee will depend on the franchise agreements between the two parties. Generally speaking, though, the franchisor will have the ultimate authority over the franchisee’s products and services offered, as well as franchise operations such as marketing, site selection, and other operational decisions.

With franchising, you can expect to be required to pay an initial fee to the franchisor and a percentage of any profits generated, known as a royalty fee. It is also common to be required to purchase the franchisee’s business equipment from the franchisor, as well as pay for ongoing training and support services.

When selecting a franchise to invest in, it’s important to consider factors such as the product or service offered, the franchisor’s reputation, the level of required investment, and the estimated timeline for seeing returns on your investment. Doing proper research on the franchise will help ensure you are making the best decision for your financial goals and expectations.

When you feel ready to make the investment, the franchisor will provide you with a Franchise Disclosure Document (FDD). This document should outline the obligations expected from you as a franchisee, as well as its responsibilities as the franchisor. Be sure to read through it carefully and, if needed, get legal advice to help you understand the terms laid out in the agreement.

Franchises are an excellent way for entrepreneurs to get involved in the business world and build a business that will provide the financial rewards you work for. Researching and understanding the franchise agreement is key to making sure you make the right investments for your goals. The IFPG is here to help you every step of the way, so feel free to reach out with any questions you may have.

Topics:

Franchising,

Franchise Agreement,

Franchise Disclosure Document (FDD)

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