Franchise businesses can operate out of the home, an office or a storefront.
Roughly one in 10 businesses in the United States operates as a franchise. Franchisors license their brand name and business plan to many individual owners, who, as franchisees, pay a flat fee initially and a percentage of sales as royalties. A franchise can take many forms, functioning as a retail storefront or within the business services sector. Often franchisees oversee specific geographical markets and may own more than one business.
Food and Retail
Many popular restaurants and retail chains operate on a franchise basis, including Subway sandwich shops and Plato's Closet clothing resale stores. The corporate side typically sells ingredients and materials to the franchisee and takes care of broad marketing efforts. Some franchise corporations contract with regional franchisees who operate several locations. For some franchises, such as pizza delivery restaurants, franchisees are assigned limited geographical areas to prevent competition among owners of businesses within the same chain.
Business Sector
Franchised businesses often serve other businesses rather than consumers. Possible franchises include tax services, information technology services, ink and paper companies, and cost-reduction consulting firms. These franchises can operate out of very basic office spaces rather than out of expensive retail storefronts. A recognized national brand can potentially attract attention and hold more clout in a competitive market compared to private practices in the same field.
Hotels and Lodging
Some internationally famous hotel chains, like Hilton and Wyndham, offer franchise opportunities, with startup costs potentially in the millions. Other franchises in the hospitality industry include smaller motels with much lower investment costs. It's also possible to operate an independent hotel or motel and later rebrand it as a franchise within a chain. These franchises operate independently but benefit from exposure and booking services provided by the corporation in exchange for fees or royalties.
Health and Personal Care
Urgent-care hospitals, senior nursing services and specialty operations such as optical care or prescription orthotic products can all operate as franchise businesses. Other health and personal services companies including hair salons, massage and spa centers, and weight-loss clinics are also open to franchise entrepreneurs. Often specific education or licensing comes as a prerequisite for these businesses, but franchise fees and other startup costs are otherwise similar to those in retail franchising.
Automotive
Virtually every vehicle-related business can be a franchise opportunity. Besides dealerships, rental agencies and repair shops, other automotive franchises include specialty operations like transmission repair, windshield replacement, exterior painting, interior upholstery or even coating truck bed liners. Many auto franchise costs start in the five-figure range, since you need little more than a location and an appropriately trained or certified staff.
Maintenance
Home and business maintenance companies often have the lowest startup costs and can be operated out of the home. Usually specializing in a certain repair or maintenance field like window treatments, roofing and siding, carpet cleaning or plumbing, these businesses begin with trained staff and professional equipment. Franchisees pay a fee and royalties to the corporation in exchange for a customer base, discounts on supplies and other benefits, such as liability insurance in a group plan.
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