What Is Franchising?

Written by Laurie Nichol
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If you're considering starting a business, and have been hearing about the benefits of opening a franchise, then you may wish to further investigate. Starting a franchise is a great way to break into the business world - owning your own business, but receiving products, marketing, and assistance from a tried-and-true company. Read on to learn a little more about the basics of franchising.

Basic Elements of a Business Franchise

Federal law defines a franchise as a business which exhibits three traits. It is a business that uses a common name or trademark belonging to a larger company, there is considerable assistance from the parent company, and lastly, a fee has been paid for this right. Simply put, a franchise is a sort of partnership - you buy into a company's successful idea, and they sell you the information you need to start it up on your own.

The fee you pay for a franchise can vary widely. Sometimes, it's just a one-time payment for the initial start-up, and in other instances, it is a series of payments or royalties paid to the parent company. The level of assistance varies, as well, from constant training and supervision aid to a one-time furnishing of materials.

Small business ideas come in all shapes and sizes. As mentioned above, the guidelines of a franchise vary so widely because of the spectrum of franchising businesses available. From sandwich shops to staffing companies, auto body repair to fruit smoothies, there are franchise opportunities to interest every business opportunity seeker!


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