What is a Franchise?
You’ve heard about them, but maybe aren’t super clear on the differences between a franchise and a business. Many transitioning service members already have what it takes to be a successful franchise owner, but aren’t sure how to get started.
What is a Franchise?
Think of a franchise as having the chance to gain access to a business owner’s experience without having to take all the risk. A franchise business setup allows you to shrink the learning curve that comes with starting a business. With this model, you get all the benefits with limited risks. The franchise owner also benefits with this model as well because it gives the owner a chance to expand into new areas.
As a transitioning service member, you’re already well equipped with the main skill you need to succeed – you need to be able to follow an SOP and operate a business according to preestablished guidelines. Chances are this approach is really familiar to you since it’s a core approach to
Franchise Business Models
There are two common forms of franchising. These are product distribution and business format.
In a product distribution franchise, the franchisor licenses its trademark and logo to the franchisee. In turn, the franchisee sells or distributes the products through a supplier-dealer relationship. The franchisor doesn’t give a complete SOP for running the business, so it’s up to the franchisee to figure out what works best. Most often, this model includes dealers – cars, soft drinks, equipment dealers, and gas stations.
A business format franchise provides a licensed brand and a way to run the business. After signing a franchise agreement, the business owner is given access to the product/service, trademark, and complete SOP to run the business. These are the most common type of franchises because they’re easier to run.
There are currently over three thousand franchises in the US. Most are food businesses such as McDonalds or Subway, but franchising isn’t regulated to just eateries. Think of a franchise as a small business that has less risk than starting one completely on your own.
As a transitioning service member, you might have a clear idea of where you’re heading once your paperwork has cleared. Or maybe you’re up for a new adventure for this new chapter of your life. If you decide to pursue owning a franchise as your post-military career, you’ll be able to live just about anywhere and work in just about any industry.
Working together with veteran friendly organizations can be a good place to start your research about which franchise will be the best opportunity for you. There are a number of questions you should ask of yourself and the franchise brand to determine if it’s the best fit for you.
Remember, there are always risks associated with any business, even if it’s an established brand. Working closely with a franchise consultant or a firm which specializes in transitioning service members will ultimately set you up for the best success possible.
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