A franchising concept is a very powerful concept in business. The word ‘franchise’ is derived from the french word franc- meaning free. The franchising concept is an alternative way for the franchisor to distribute goods and avoid major investment and liability over building ‘chain stores’. The franchisor’s success is dependent upon the success of the franchisees because the franchisee has a direct stake in the business. The franchising concept hasn’t always been understood, and not until the 1950′s (with Ray Kroc and McDonald’s) was it recognized as a popular and legitimate form of business and today franchises do more than 40% of the US Gross National Product and account for trillions of dollars of annual sales. The US and many other countries have federal and state laws monitoring and accessing the integrity of franchises.
Franchising businesses work best when the business has a proven track record of profitability and with businesses which are easily duplicated. When looking at starting up a franchise you want to take a look at the system (or business model): how long has it been around? Have people been successful with it? Is the company or the organization profitable? Is the company or organization willing to train you? Also, you want to ask yourself, “is the franchise duplicatable?” Can you and other franchisees do what the business model requires from you?
Now more than ever with the internet and e commerce has there been a tremendous opportunity for people to leverage the power of duplication (franchising) online. Buying a proven franchising concept such as McDonald’s or Subway would cost you millions of dollars to start and maintain. Now, people are able to leverage the internet and establish and maintain multimillion dollar organizations for the cost of a pair of tennis shoes!
The word franchise really does mean “free” to a lot of people in the US and around the world because the power of duplication has allowed them and their family to become financially free and prosperous.