TYPES OF FRANCHISE STRUCTURES
Learn more about the types of franchise structures available in today’s marketplace including single unit, multi-unit, area developer, and master franchises.
TYPES OF FRANCHISES
Minimize Risks – Maximize Return
Isn’t this what everyone wants to do when making an investment or owning a business?
Finding the right fit is key to achieving this goal because if it’s the right fit, you’re happy and excited about your business venture and the likelihood of you being successful is dramatically increased.
You need a professional matchmaker, coach, and business advisor to minimize your risk and maximize your return. We are ready to assist you in finding the right franchise or existing business opportunity.
Call us today at (972) 786-0017 for a free consultation.
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SINGLE UNIT FRANCHISES
Buying a single unit franchise is the most likely place a brand new entrepreneur would begin. In this type of franchise, the franchisee would only be responsible for running one unit. However he or she would be extremely involved with all of the daily operations of the business.
The franchisee typically has a particular territory that is covered by the unit. Territory is usually based on a number of miles, number of households or businesses, or certain cities, counties or zip codes.
With a single unit franchise, the investment costs are less than opening up multiple units. Although most single unit franchises yield a nice income, there is more earnings potential with multi-unit franchises.
MULTI UNIT FRANCHISES
A multi-unit franchise is an agreement where the franchisor grants a franchisee the rights to open and operate MORE THAN ONE unit.
There are two ways a multi-unit franchise can be achieved:
✔ Area development franchise or
✔ Master franchise.
The primary determination of the number of units a franchisee is allowed to operate is financial, and is typically a combination of liquid capital and net worth.
In a multi-unit agreement, the franchisee owns and operates multiple franchise units, most often in the same geographic area. Individuals can become multi-unit owners, and groups or “entities” can also be multi-unit owners.
As an Area Developer, a Franchisee owns a large territory with the objective of subdividing and developing individual franchise locations. The franchisor will sometimes require the franchisee to open a certain number of units within a specified time frame.
Some Area Franchise Territory Agreements will also allow the Area Franchisee to sell single units within their area territory. Typically, there’s compensation from a portion of the initial franchise fee and a percentage of the on-going royalties.
A master franchise agreement gives the franchisee more rights than an area development agreement. In addition to having the right and obligation to open and operate a certain number of units in a defined area, the master franchisee also has the right to sell franchises to other people within the territory, known as sub-franchises. Therefore, the master franchisee takes over many of the tasks, duties and benefits of the franchisor, such as providing support and training, as well as receiving fees and royalties.
- Coming up with the idea of a new franchise concept that explodes in your area with dozens
of new units opening up
- Having control of this concept and receiving royalties and franchisee fees on a consistent basis
- Having an idea like McDonalds and having people line up at your door to buy your opportunity
- Having access to the best business experts to help guide you in your new venture to build
your organization to last
With master franchising, you get all the benefits mentioned above but without the expense of having to develop the concept from scratch. You get control of the successful franchise system in a specific geographic area, a proven track record that works, the brand name and even a partner in the form of a corporate office and other master franchisees to give you valuable support, latest innovations and business expertise whenever you need it.
Improved Quality of Life
Master Franchisees own and enjoy a quality of life business. Here are some key characteristics
about the typical Master Franchise:
- Very few customers
- Very few employees
- Very little office space
- You build equity in the business at a much faster rate than a normal business
- Low overhead
- You have the option of setting up your own franchises at reduced rates
- You own an exclusive territory
- More freedoms exist in a Master Franchise than in a normal franchise
- You stay up to date on the latest technology
- You don’t need experience in the specific industry
- It can be started part-time and then you may move to full-time as required by the business
you bring on.
At Franchise Opportunity Specialist, we can help you find the right franchise or existing business opportunity. We’ll assist you in mapping out your business model, focus in on the right opportunity, prevent mistakes, and navigate the process.
Give us a call at (972) 786-0017 for a free consultation or complete the following form and we’ll contact you.