Aspiring entrepreneurs interested in starting a small business are increasingly opting for one of the various types of franchising. There are a variety of franchising models to choose from in multiple industries. For example, if you want to start a new window business for sale, you need to figure out which company you want to work in, how much money you can invest, and how much time you have available.
Franchising is a versatile business concept that may be used to franchise almost any type of business. Different characteristics, such as the franchisee’s investment level, the franchisor’s strategy, marketing, operations, relational type, and more, can be used to categorize franchises.
Job franchises, product franchises, business format franchises, investment franchises, and conversion franchises are the five basic franchises.
Job-Franchise
This is usually a home-based or low-cost franchise chosen by someone who wishes to create and run a small business on their own, for example, a window business for sale. Typically, a franchisee must purchase minimum equipment, limited inventory, and, in some cases, a vehicle.
Travel agencies, coffee vans, residential lawn care services, plumbing, drain cleaning, commercial and domestic window cleaning, cell phone accessories and repair, real estate services, shipping services, pool maintenance, corporate event planning, children’s services, etc., under this category.
Product or distribution franchise
These product-driven franchises, also known as Distribution Franchises, are where the franchisee distributes the parent company’s products and some related services. The parent company often grants its licensed trademark but not a whole business management system. Large product dealers make up the majority of product franchises. As a result, product or distribution franchising accounts for the largest share of overall retail sales in the United States.
Product franchises primarily deal with huge items such as automobiles and auto parts, vending machines, computers, bicycles, appliances, etc. The biggest percentage of overall retail sales goes through product distribution franchises.
Exxon, Texaco, Goodyear Tires, Ford, Chrysler, John Deere, and other vehicle manufacturers are well-known product distribution franchises. In other circumstances, such as with soft drink companies Coca-Cola and Pepsi, a franchisor licenses distribution and part of the manufacturing process.
Here are a few examples:
- Apparatus (Frigidaire, Kenmore, LG)
- Automobiles and automobile maintenance parts (GMC, Ford, Exxon, Goodyear Tires)
- Bicycles
- Computers are used in many different ways (Dell, Asus, Hewlett Packard)
- Large-scale machinery (John Deere Tractor, Caterpillar)
- Machines that sell things
Business Franchise
The most popular franchising is business format franchising, which most people think of when they hear about franchising. The business format franchisee not only gets to use the franchisor’s trademark, but it also gets the entire system to run the farm and sell the product or service.
The franchisor provides initial and ongoing training and support, just like when you aim to start a window business for sale. Moreover, there is a thorough strategy and procedures for practically every firm area.
This is the most common sort of franchise system, and the one most commonly mentioned when discussing franchising is business model franchising. Such franchises are available in more than 70 industries.
Under the business model, a franchisee operates their firm under the parent company’s brand and receives the whole proven system for operating and marketing the products or services.
The parent company gives a clear plan, detailed procedures, extensive training on nearly every business area, and initial and ongoing assistance. Here are a few examples:
- Cafeteria (Olive Garden, Longhorn, Golden Corral)
- Chick-fil-A, McDonald’s, Subway, and KFC are examples of fast food.
- Gold’s Gym, Planet Fitness, and Anytime Fitness are examples of fitness centers.
- The Children’s Place, Abercrombie & Fitch, and Bath & Body Works
- Window Medics window business for sale
Investment Franchise
An investment franchise is often a large-scale firm that necessitates a significant financial investment (huge compared to other franchising options). The franchisee is a prominent investor who invests the money and hires a management team to run the business or occasionally even hires their franchisee. This sort of franchising is generally utilized to generate a return on investment with minimal personal engagement and the potential for a monetary gain upon exit.
Conversion Franchise
Conversion franchising is the only hybrid among the five types of franchising. It’s a method of expanding franchise systems in which a franchisee joins forces with an existing business and changes it into a franchise unit. The franchisee adopts the parent company’s trademarks, marketing, advertising initiatives, training system, and client service norms. Because the franchisee isn’t beginning a new firm from the ground up, this is a means for established businesses to grow quickly. The foundations of the firm, as well as a clientele, are already in place. The independent company that gets into a franchise partnership gains the strength of a well-known, successful brand and all of the associated support systems.