What is a Franchise?
A franchise is a business arrangement where an established brand or company (franchisor) allows an individual or group (franchisee) to use its trademarks, products, and business model in exchange for a fee or royalty. Franchisees benefit from the brand recognition and support of the franchisor while following specific guidelines to maintain consistency.
Types of Franchises
- Product Distribution Franchise
- Business Format Franchise
- Manufacturing Franchise
Benefits of Franchising
Franchising offers entrepreneurs a proven business model, training and support, and higher success rates compared to starting a business from scratch. Franchisees also benefit from marketing and advertising campaigns run by the franchisor.
Examples of Franchises
McDonald’s, Subway, and Starbucks are well-known examples of successful franchise businesses that have expanded globally through the franchise model. These companies have strict standards and guidelines to maintain brand consistency across all locations.
Franchise Case Studies
One successful franchise case study is that of Dunkin’ Donuts, which started as a small coffee and donut shop and grew into an international franchise giant. Dunkin’ Donuts provides its franchisees with extensive training, marketing support, and a popular product line to ensure success.
Franchise Statistics
According to the International Franchise Association, franchise businesses generated over $787 billion in economic output in the United States in 2020. Franchises also support over 8 million jobs in the US economy.
