What Are the Different Types of Franchises That Exist Today?

When you think of franchises, what’s the first thing that comes to mind? If you’re like most people, you probably quickly think of fast-food restaurants when you hear the word “franchise.” And while fast-food restaurants do make up a large percentage of franchises (not surprisingly, McDonald’s is the number one franchise in the US), there are many other different types that might intrigue you.

If you have an inclination to open a local small business, read on to learn more about the different types of franchises that you can invest in.

Product Franchise

A product franchise may also be called a distribution franchise. In this type of franchise, the franchisee distributes the products made by the franchisor. For example, Ford, Chrysler, and other car companies are well-known product franchises. The parent company provides the use of its trademark but doesn’t provide the system needed for running a business.

Most product or distribution franchises are large product dealers. These types of franchises make up the largest percentage of retail sales in the US. These franchises can be especially lucrative if you are the sole distributor of a well-known brand in an area.

Business Format Franchise

Business format franchises are the most common types of franchises. This category is where you find fast-food restaurants. In this type of franchise, you operate under the brand of the parent company. You also get the entire system to operate the business and market the product or service.

The parent company provides detailed plans and training. Franchises have a limited ability to deviate from these proscribed procedures. Fast food restaurants are the most well-known business format franchises. Others include sit-down or fast-casual restaurants, fitness centers, retail stores, and even home health care.

Home health care is becoming more and more common and may be a wise franchise to invest in. Check out some of the reasons to own a home care franchise to help you learn what might work for you.

Job Franchise

A job franchise is a good choice if you don’t want to make a large-scale investment. Job franchises typically allow you to buy in with a low investment and don’t require a large staff. Common expenses include a franchise fee, equipment, materials, and a vehicle. Overall, though, the investment is much lower than it is for other franchises.

Many different industries can be franchised using this model, including cell phone repairs, cleaning companies, even planning, pool maintenance, plumbing, lawn care and landscaping, real estate, and shipping services.

Which Types of Franchises Are Best For You?

If you are interested in investing in a business, make sure you know the types of franchises available to you before jumping in. Whether you want to make a small investment or a large one, there is a business franchise opportunity out there for you.

If you found this article useful, be sure to check out some of our other business tips before you go.