What is a Franchise?
A franchise is a business model where an individual or group (franchisee) purchases the right to operate a business under the name and brand of a larger company (franchisor). The franchisee benefits from using the franchisor’s established business model, name, and support system, in return for ongoing fees and royalties.
Types of Franchises
- Product Distribution Franchise
- Business Format Franchise
- Management Franchise
- Single-Unit and Multi-Unit Franchises
Examples of Franchises
Some well-known examples of franchises include McDonald’s, Subway, Starbucks, and UPS. These companies have successfully expanded their brand and reach through franchising.
Franchise Benefits
Franchises offer a turnkey business opportunity with built-in brand recognition, marketing support, training programs, and a proven business model. Franchisees also benefit from economies of scale and collective buying power.
Case Studies
One successful franchise example is Subway, which uses a business format franchise model. Subway has over 40,000 locations worldwide, allowing franchisees to tap into a global brand and proven processes.
Statistics on Franchising
According to the International Franchise Association, the franchise industry contributes over $2 trillion to the US economy and employs over 18 million people. Franchising continues to be a popular business model for entrepreneurs looking for a proven path to success.
