Overview
Franchises are also known as chain stores.
These may include food vendors, supermarkets, restaurants, clothing
retailers, supply companies, and professional service firms. Franchises
operate as independent businesses and as part of a bigger company.
Smaller, independent businesses are owned and operated by a corporate
headquarters that creates a standard for production, services, and
marketing techniques. A person who owns and operates a franchise is
known as a franchisee.
How It Works
The process of becoming a franchisee varies by company and industry.
For almost all companies, the process of becoming a franchisee is
competitive. Some companies evaluate candidates by criteria including
education level, business experience, and performance in previous
positions. A franchisee will either purchase a new or existing
franchise. The franchisee will then lead the franchise as an independent
business and as part of a larger corporation. Franchisees will be
responsible for meeting revenue targets, managing employees, and
managing daily expenses.
Benefits
Franchisees enjoy the benefit of working for a large company and for a
small company at the same time. Franchisees work with established
business plans, marketing strategies, products, and services. The
franchisee owns all of the franchise's assets; however, a franchisee
shares legal responsibility with the franchise's corporate headquarters.
Costs
Well established franchises require investments of over $1 million.
Owners are also responsible for the costs of regular business operations
Timing
Typically, those who wish to purchase and operate a franchise must
wait until a franchise becomes available. Corporate headquarters will
determine where to establish new franchises. Existing franchisees may
also wish to sell their business.
