What is Franchising?

Franchising is a method of doing business; offering people the freedom to own, manage, and direct their own business. The franchisor is the one who owns the right to the name or trademark of the business. The franchisee is the one who purchases the right to use the trademark and system of business.

Business format franchises offer the franchisee not only a trademark and a logo but also a complete system of doing business. The word “system” is the key concept to franchising. Essentially, the franchisee purchases someone else’s expertise, experience, and method of doing business.

Source: Spring/Summer 2008 Franchising Opportunities Guide

What are the advantages of Franchising?

1. Experience of the Franchisor: When an individual buys a franchise, he/she purchases the proven methods of the franchise system. In any new business, much time and money are spent in trial and error. A franchise may eliminate many start-up problems. This reason permits one to open a franchise business with little or no previous experience in a given industry.

2. Training: A franchise system will provide training for the new franchisee. This training should prepare the new owner in all facets of the business.

3. Advertising: Most small businesses cannot afford to do extensive advertising. An advantage to owning a franchise is the right to purchase/use the franchise system’s advertising. Furthermore, as the number of franchisees increases, so does public awareness of the franchise. This can be a tremendous advertising advantage.

4. Ongoing Advice, Research & Development: Franchisees need assistance throughout the term of their business endeavors. The franchise system’s staff of experts can give this needed help in all aspects of the business. The franchisor is also in a position to provide on-going research and development. Thus, new products and services will be brought to the attention of the franchisee.

5. Business Synergy: The word “synergy” refers to the idea that the sum of the whole is greater than the separate parts. Those who buy a franchise become part of a family where all members work together for the good of the whole.

Source: Spring/Summer 2008 Franchising Opportunities Guide

What is the first step to buying a franchise?

Request a copy of the LewisStyle^® Franchise Disclosure Document. Every franchise system is required by the Federal Trade Commission to prepare an extensive disclosure document for each potential franchise purchaser. When you are given the disclosure, you will be asked to sign and date a statement that you received it. No monies can be taken by the franchise system for 14 calendar days from the time that you signed the disclosure. The 14 days affords you the time to study, evaluate, and prepare your financing, if needed.

Source: Spring/Summer 2008 Franchising Opportunities Guide