What is the Franchising Business Model

What is a Franchising Business Model

As defined by Franchising.com, the franchise business model is a hybrid model where some aspects of sole ownership are combined with those of a larger corporation. It allows the business owner to grow their own business from within the model and structure of a larger one. The Franchise business owner sells the rights to use their brand name, systems, logo and model to individuals, allowing them to create their own businesses.

A franchise is a great way for a novice business person to get started in their business career.

How to spot a Franchise Business Model

In a franchised business, it’s the owner of the primary business that sells the rights of their business to other people. It’s the rights to use their brand, their logo and their systems. Those rights are sold to an independent business owner known as a franchisee. Generally the franchisor then provides ongoing support to the franchisee by way of training, improvements in business operations, equipment upgrades and sales and marketing. Generally the franchisee in return pays a royalty fee to the franchisor every month.

The upsides of a Franchise Business Model

A huge upside of the franchise business model is that the risk of failure is diluted. The initial capital investment has already been made by someone else and the model is tried, proven and tested. Therefore you don’t need to undertake that risk yourself. If you’re a new business owner with very little experience, it can be a great way to get started and get the experience.

Common misconceptions about the Franchise Business Model

By owning a franchise, it doesn’t mean you’re not responsible for the success of that business or for any negative actions that happen within the business. You are still responsible for what goes on within your own franchise business and will be held accountable for that every time. If the franchise underperforms, you are the one responsible.

Things you should consider.

Before you get into the franchise business model, make sure your operation and way of working is conducive to the franchise system. If you personally don’t fit the mold then it can be hard for you to be successful. The ideal candidate of a franchise you must be happy to work within someone elses framework to become successful. Similarly you must be happy to achieve similar goals to the master franchise as it’s pivotal for your own success.

If you’re looking for the perfect franchise business for you and your family, look no further than JAN-PRO.

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Cleaning services provided by independently owned and operated JAN-PRO cleaning franchisees. To learn more about the JAN-PRO organisation & business structure, click here.

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