A franchise allows someone to run a business location that is owned by a bigger company, called a franchisor. So for example, if you wanted to open a McDonalds or a Pizza Hut restaurant in your neighborhood, you would have to buy a business franchise from them.
The franchise location gets to use the proven brand name and business plan by paying the franchisor.
Advantages of starting a business franchise include:
- A brand name that is already known to the public
- Business methods and procedures that others have found to be successful
- A franchisor-sponsored training program
- Advertising and marketing support, or sales leads that will help you attract customers
A franchise is a contract with a franchisor that allows you to use a proven brand name and business plan in return for payments to the franchisor. Many people decide to invest in a franchise instead of trying to start a business from scratch.
There are franchise opportunities in every industry - including tanning salons, janitorial services, child care and several home-based businesses. Most individuals interested in buying a franchise spend weeks or months doing preliminary research to help them decide which industry and brand name best fits their situation.
When you do your research, think about starting with a class in franchising at your community college, or visit one of the counseling services available in your community. If you live in the City of Chicago, you can sign-up for a monthly workshop run by the Department of Business Affairs and Consumer Protection, or attend the annual Small Business Expo sponsored by the Chicago City Treasurer. Outside the city, try the Illinois Department of Commerce and Economic Opportunity.
There are many private organizations that provide free assistance to people that want to be franchise owners. Two of the best are:
When you finish your preliminary research, contact the company that you liked the most and ask for further information.