For those of you now considering buying a franchise, there are some basic things to know about the franchise option for business ownership. Many people don’t realize that franchising, like any other startup business, has many facets of its own and things that you will need to be familiar with and learn about before beginning your search for the perfect option for you. Getting really familiar with some of the most common franchise terms helps, yes, but it also helps to know what types of franchises exist. True, for every industry, there is a franchise, but franchises are basically divided into three basic types.

Here, we will name those three types of franchises, and explain a little what each entails.

Product franchises are the first type of franchise that we will discuss and explore. A product franchise is a great way for manufacturers to take control of how a retailer markets their product. The manufacturer gives the franchisee permission to distribute the product and allows the owner of the retail establishment to use that brand and trademark to further enhance promotion and build consumer trust. Product franchises are usually a food service oriented business. However, the downside is that these can sometimes be very fashion-based, so plan your market research accordingly. Steve Steve Rosen, CEO of FranNet, had this to say about product franchises:

“A lot of product businesses are based on fashion. It goes in cycles. People love coffee or ice cream or things that are high or low in fat; they either love or hate donuts. You have to keep that in mind.”

A commercial format franchise is likely to be one of the things that comes up the most in your search for the perfect franchise. You will find that this is a very popular type of franchise and there is a good reason for it. The company generally provides the franchisee with not only an excellent system for running the business itself, but generally re-lends the name and trademark of the parent company. These are often well-known brands and automatically inspire trust, which is a great benefit for the commercial format franchise. Typically, the company will also provide a great deal of assistance not only for start-up, but also for ongoing business management, so this format is a great way for someone to become a business owner. , but without flying blind. Think of a commercial format franchise as a kind of safety net to ensure the success of the franchisees involved in this.

Manufacturing franchises are another area where large amounts of money come into play and are also quite common. These types of franchises generally give a group or organization the rights to produce or manufacture a certain product again, with the ability to use that name and trademark for marketing and promotional benefits. This type of franchise is usually food and beverage, but can sometimes be affiliated with other products as well.

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