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How To Find The Right Franchise Category

When you are starting a franchise, your success is largely depended on which of the many franchise opportunities you choose. A major part of your research regarding a franchise business should focus on how different franchise concepts are categorized and which category is best suited for you. Below are some of the ways in which various franchise opportunities can be classified. Go through them to get an idea on how you will proceed in your quest of finding the right franchise category. But generally, franchise opportunities are categorized according to what they sell or offer as a service.

According to cost: There are some franchise opportunities that cost over $1 million whereas some concepts cost as low as $15,000! Most of the conventional categories (according to the products/services offered) have high cost, medium cost and low cost franchises. Some are labeled as small business franchises, as they fulfill the SBA criteria for small businesses. If money is your main criterion of judging, then this is a good way of addressing the issue of choosing a franchise category. However, don’t forget to compare the support system and the training system of the franchises. Low price must not come with low support and training.

According to time committed: The different franchise opportunities can be divided according to time you commit as an owner. You can be a part-time owner or a full-time owner. Many franchises explicitly state that their franchise business for sale offer is only for individuals who can be full-time owners. But nowadays many franchise opportunities are open to part-time or absentee ownership too, provided they fulfill certain criteria. And of course, they have to employ a competent manager! Then there are several home-based franchises, in which the owners can devote as much time as they want.

According to mode of franchising: This is the broadest way of dividing the franchise industry and is based on how the franchise business is being carried out. It can be product franchising or business format franchising. In the former type, the franchisors develop a product/service and give the franchisees the right to sell that product/service from their location. Here, the franchisees need to maintain the uniformity of the logo and other trademarked properties. In the latter one, the franchisors develop an operating system and teach that to the franchisees. The franchisees who buy a franchise from them are supposed to maintain the uniformity of the operating system, no matter where they are located. So, if you like little bit of freedom within your franchise business, the former is better as it allows changes in the operating system. The latter will be very strict regarding this issue.

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