1. What kinds of franchises are there?
There are a number of different types of franchising. Everything from home-based businesses to retail storefronts, franchises are available in a variety of industries and span 150 different categories like automotive, beauty and health, business services, fast food, home improvement, hotels and motels, printing, publishing, retail, sports, travel, video and more.

2. What can a franchise do for me that I cannot myself?

Minimize risk Franchising's primary benefit is risk minimization. With a failure rate of ninety percent in the first three years, starting a new business is risky. When you take a look at why so many new businesses fail, you find that the primary reason is that the owners have to not only offer a product or service, but they must finance the operation, find and reach the right target audience, and compete with more established businesses. Franchising helps mitigate the risks these business realitiess pose by shoring up the franchisee's strengths, augmenting his or her efforts with branding and marketing support, site location, and training. With a franchise you can be a business owner with a built-in support system.

Try before you buy Another reason to buy a franchise is that a franchise investment can be thoroughly researched before any significant expenditures are made. Existing franchisees offer a wealth of information about the business so that new franchisees can try the business on before they buy to make sure it's a good fit for them.
Proven track record Franchisors sell a defined, proven business format or method of operation, offering a product or service that has sold successfully. An independent business is based on both an untried idea and operation.

Group purchasing power Franchisees can often buy lower-cost goods and supplies through the franchisor, resulting from the group purchasing power of all the franchises.
Branding Established franchisors offer national or regional name recognition. While this may not be true with a new franchiser, the benefit of starting with one is the potential to grow as its business and name recognition grow.

Consistency for consumers Franchising provides a uniform system of operation, so that consumers receive uniform quality, efficiently and cost-effectively. A uniform system brings with it the advantages of mass purchasing power, brand identification, and customer loyalty, capitalizing on the proven format.

Established business practices A franchisor also provides management assistance, including accounting procedures, personnel and facility management. An individual with experience in these areas may not be familiar with how to apply them in a new business. The franchisor helps a franchisee overcome this lack of experience.
Business plan development Franchisors help franchisees develop a business plan. Many elements of the plan are standard operating procedures established by the franchisor. The most difficult part of a new business is its start-up, since even experienced managers lack the knowledge to set up a new business

Professional marketing support One of the biggest benefits to franchising is marketing. The franchisor can prepare and pay for the development of professional advertising campaigns. Regional or national marketing done by the franchisor benefits all franchisees. In addition, the franchisor can provide advice about how to develop effective marketing programs for a local area through a cooperative marketing fund, to which the franchisees contribute a percentage of their gross income.

Financing assistance It's possible to receive assistance in financing a new franchise through the franchiser, who often makes arrangements with a lending institution to lend money to a franchisee. The franchisee must still accept responsibility for the loan, but the franchisor's involvement usually increases the likelihood that a loan will be approved.

3. What type of return on investment should I expect?
The return on investment, or ROI, will vary from business to business. When evaluating each franchise, be sure to check whether they have an earnings claim in their UFOC (Uniform Franchise Offering Circular) and what the typical ramp-up period is to achieve these targets. Another important factor to consider is your involvement in the operation of the business. If you are pursuing an owner-operated business, you should expect a larger and more immediate ROI since it will be your only source of income. Businesses that only require part-time involvement are intended to supplement your current income initially and will ramp up more slowly.

4. How do I contact a franchisor to begin the investigation process?
There are a number of ways you can go about requesting information. If you are comfortable reviewing a franchise on your own, you can contact their development department directly. Most franchise opportunities will have this information online or available in franchise publications. Another way to find out about franchise opportunities is to attain the services of a Franchise Consultant to assist you in your search. With so many franchises available, it is often beneficial to talk with an expert.

5. Once I decide to investigate a franchise, what should I expect?
The approach companies take to provide you with information and material on their franchise will vary. The most important thing is to have a point of contact that will give you the information you need and answer your questions.

6. How can I determine the financing if I qualify for a franchise financially?
Franchisors will typically communicate their financial qualifications when you contact them. There will be some differences in each company's definition of Net Worth and Liquid Assets, so just ask what they are. It is important that you do not overlook or omit anything when preparing your financial data. A franchisor who understands your financial position will be able to determine if their business is affordable and can meet your needs.

7. Will the franchisor provide assistance with financing?
Once you become a franchisee, most franchisors will have a finance department that will assist you with obtaining your loan. They will provide business plans, pro formas, and names of lenders their franchisees have worked with before. Be sure you know the level of support each franchise will provide when evaluating it as an opportunity

8. Where can I find additional sources of capital?
As stated before, many franchisors will provide and or assist with the financing of their business. However, there are many banks and lending institutions willing to fund viable franchise opportunities. A good place to start is with your local bank or financial institution.

9. Should I only consider franchises where I have actual work experience?
Absolutely not! It is crucial that you keep an open mind as you look at different franchise opportunities. What is more important is how a particular franchise opportunity's business model fits your long and short term goals and financial capacity, along with your individual skill set. Remember, a franchise opportunity should have a successful business model and the ability to teach it to you.

10. How long does it typically take to start a franchise?
This will greatly depend on the type of business that you are considering. Some of the variables include: if there is real estate involved, if you are financing the option, and how long the training takes to complete. Generally speaking, most opportunities will take anywhere from 6 to 18 months to get started. Make sure that the start-up time fits in with your goals and financial resources.

11. Are there any tax benefits to owning a franchise?
As with all businesses, you will have some tax advantages with owning a franchise. Please check with an accountant for details.

12. What should I look for in a franchise?
It is important to keep an open mind and to not shut doors without investigating the various franchise opportunities properly. When examining franchise opportunities it is important to establish exactly the nature of the role that you, as a franchisee, would be required to carry out. Sometimes it is possible to dismiss an opportunity too easily. For example, the role of a franchisee taking out a cleaning franchise is to manage the business and take on new customers but not to clean carpets. It is also important to understand that you may not be acceptable to a company that operates in a field where you have previous experience. For example, a print franchisor will almost certainly not take a trained printer as a franchisee. The role of the franchisee is such that he will employ a printer but the franchisees role is much more focused on management and selling.