Franchising – paying for the right to use an established brand or trademark under a proven business operating system – is an increasingly popular way for entrepreneurs to own a business without having to build a company from the ground up. Leveraging already perfected systems, the franchise owner can avoid many of the mistakes that doom start-up entrepreneurs. There are thousands of opportunities across a wide range of industries with varying levels of financial and sweat equity required. If you’re a hard worker with access to capital and who doesn’t mind giving up some independence as an owner, buying a franchise may be a good way to invest in your future.
Franchising is growing faster than the overall industries where franchises are concentrated. And franchising means more than just fast food outlets. There are more than 75 industries that operate within the franchising format, including automotive, electronics, retail, food, financial services, sports and recreation, travel, and many others.
Buying into a proven business model with a built-in customer base can take some of the risk out of starting your own business, particularly when you’ve got a franchisor backing you up with training and operational support. But franchising requires giving up some independence and playing by the rules of the franchisor. Plus, it requires a significant capital investment to get off the ground.
Buying a franchise is far from a risk-free endeavor. But franchising is governed by federal and state laws that require the distribution of two detailed legal documents – the Franchise Disclosure Document and the Franchise Agreement – containing everything you need to know about the franchise system, processes, procedures, costs, and requirements. Read everything carefully, and consult with an attorney, before you sign on the dotted line.