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What is a Franchise? Advantages and Disadvantages, Basic Terms

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Getting Started in the World of Franchising Step by Step

Franchising is the consolidation and expansion of a business idea that has already been tested, that has prevailed and remained in time, constituting a brand with wide acceptance and preference for a diversity of clients that have made it part of their style and taste.

It is considered one of the best marketing strategies for the expansion of a business idea.

For the franchise to be granted there must be an agreement between the franchisor and the franchisee in which the first one grants some rights that belong to him and that he has built throughout the time to the franchisee, who usufructuates them paying some rights and authority on the product.

Keywords: franchise, advantages and disadvantages, marketing strategy, business expansion.

100 Most Profitable Franchises by Category

Next, the most outstanding and representative franchises are presented in the business ideas, which we divide according to the theme you want to work on. It is very important that each section you find in order of initial money to work with them.

Franchises of Travel Agencies

You may have heard that the travel industry has weathered the recession because of its continued growth despite tough economic times.

So the time to discover and invest in a travel agency franchise is now, because it will always be a successful business option. Thus the business idea of a travel agency franchise is aimed at entrepreneurs who like to work with public interested in traveling to different parts of the world.

When you start your own travel agency franchise you will get important benefits such as commissions for all the trips you sell. However there may be some disadvantages, such as, you must pay between 2 and 3% for the sales volume and you must keep in mind that it takes time for profits and make the client portfolio. View category. You can see the most profitable travel agency franchises here

Food and Beverage Franchises

When people think about investing in a franchise, almost always their first thought is food. This reaction is considered natural considering that most high-profile franchise concepts are food related.

It is a fact that, there is an important list of franchises, some 119, that relate to food, and that have representation in multiple individual places to eat something.

These places range from vending machines, “carts” or even fast food vehicles, restaurants, stalls among others. Food and beverage franchises are aimed at entrepreneurs who have experience and a taste for gastronomy and cuisine.

Entertainment and Leisure Franchises

Celebration, entertainment, and leisure franchises are very successful because people are continually planning special occasions, vacations, and recreation.

So, these businesses are sought after and preferred by a diversity of customers who want to have fun, entertain family and friends, but don’t want to deal with all the stress of planning a special event, entertainment or free time.

If you like to plan events, decorate, welcome, organize this franchise is for you. Franchises of this kind have the advantage that they bring significant profits if the franchisee is creative and committed to his or her business. It can be disadvantageous if the investment costs are high and you don’t have financial support from a bank. You can see the most profitable entertainment and leisure franchises here.

Office and Computer Component Franchises

Nowadays with the use of new technologies in all spaces, people need to invest in intelligent equipment such as laptops, mobile phones, and other equipment that are no longer seen as a luxury but a necessity due to the utility they represent to solve important problems of study, work, security, inventiveness among others.

Acquiring a franchise of this branch results in an important investment that can bring you many economic advantages in the short and medium term. However, if the field is not well known it is preferable not to get involved to open a computer store as it may neither know what sells nor know how to advise customers, and also depend on another in this business can be a risk. You can see the most profitable franchises of computer and office

Franchises for Buying and Selling Gold and Metals

These shops usually act as intermediaries and are a quick way to get money, which is why they have gained a lot of popularity. People at the time of an emergency can sell their garments of gold, silver or any other valuable metal and get cash immediately. The franchise grants important earnings in commissions for this concept.

A disadvantage is that the buyer of gold, silver or other precious metal will only have a profit if the selling price he gets in the future is higher than the purchase price. You can see the most profitable gold and metal franchises.

Jewelry and Leather Franchises

These franchises are characterized by being innovative businesses that already have an image and a portfolio of clients that follow them and prefer as they incorporate avant-garde designs, including mixed materials and conceptual proposals, for an audience with a high sense of fashion, taste and elegance.

Although it is a traditional business, this business has sought to expand with the franchise modality to adapt to new formats and current trends. A disadvantage of this business is that it is aimed at a more select public, which has high aesthetic tastes, with greater economic possibilities than other groups of customers, which allows the purchase of jewelry. You can see the most profitable franchises of Jewelry and Leather here.

cheap franchises

Franchise Consulting, Real Estate and Legality

Nowadays, more knowledge is required in almost all fields to carry out activities, buy real estate or resolve legal issues, which is why franchises and businesses in this area have been increasing. People come more often for advice.

If you have experience in the above fields, this business idea can bring you interesting profits and dividends. However, there may be some disadvantages related to the complex communication between networks, decision making, franchise commitments, point of sale benefits and the relationship with the franchisor. You can see the most profitable franchises of Consultancy, Insolvency and Legality here.

Franchises for English Courses and Private Lessons

Recently, due to the fact that many people work and have other occupations during the day, it is not possible for them to take English, other languages and other courses in a face-to-face way, so they turn to online courses as an opportunity to develop knowledge and increase skills in order to access better jobs.

For the Spanish education conglomerate, this field is one of the most important pillars, as it has created more than 3,000 new jobs. The advantage of this franchise is that if the investor is bilingual or knows the field of courses that are promoted on the network, it is easier to run the business and get the profits than if you do not know about it.

The largest audience for companies are children and teenagers, so 81% of franchises focus their business on this public. Due to the greater ease of learning shown by children from an early age and globalization, language academies and other courses have a better use of resources and more support.

One of the main disadvantages of this franchise is that it needs a control of the performance of the students online, since in general, the loneliness and lack of guidance of the student makes him abandon the course.

Another disadvantage is the quality and navigability of the courses, which should be very friendly to prevent students from having problems accessing them. You can see the most profitable franchises of English Courses and Private Lessons here.

Sports Shops Franchises

Sports franchises are all considered very profitable, because people are now interested in and motivated by maintaining fitness and body image. This feature can often be an advantage when applying for a job.

Employers often deny that they are impressed by the physical appearance of the people they hire but, more often than not, this fact can be a plus when assigning a job. That’s why more and more people access gyms and seek training to maintain weight and fitness.

Therefore, a sports franchise can be a highly profitable and profitable business idea. This franchise is aimed at those investors and entrepreneurs who like sports, fitness and training. It can be disadvantageous if the investment is very high and it is not achieved in the short term to attract as many customers as possible and if the environment where the gym is placed and there are other similar competing was not studied. You can see the most profitable franchises of Sports Shops here.

Hygiene and Pest Control Franchises

Hygiene and cleaning franchises are highly profitable due to the obligatory nature of restaurants, food and beverage stores, food collection and storage centers, to keep these spaces free of microbes, rodents, cockroaches and other pests.

Likewise, the cleaning and ornament, with greater boom are sought by the population who want to have ever higher levels of hygiene and sanitation inside homes, offices, workplaces, institutions, sports facilities and other companies in general, because it is a requirement of job security and domestic, in many laws and regulations.

The franchisees of these companies specialized in domestic support, laundry, dyeing, spare parts, disinfection, ventilation, organization, pest control through the application of products that respect the environment, obtain important benefits and profits because they are increasingly demanded and sought to solve all these environmental problems.

A disadvantage is that a series of formalities and permits are required before opening, such is the case of the activity license, for which the project must be presented drafted by a technician and authorized by the professional association. In addition, an environmental licence is required, and registration in the Official Register of Establishments and Pesticide/Biocide Services of the Autonomous Community. You can see the most profitable Hygiene and Pest Control franchises here.

franchises for Business Solutions

These are very specific franchises related to software for SMEs, financial consulting and advice for innovative business ideas. These services are sought by companies to make sure they have the right software and up to date to operate their business.

In addition, they are services demanded by investors under the advisory modality when there is interest in operating businesses that produce profits and can be managed easily and efficiently.

Those who wish to enter this business must have knowledge of information technology, economics, and management of SMEs. These franchises dominate the space of self-employment, incorporating with great success in the field of professional consulting and advisory services.

A disadvantage of these franchises is that both large and small companies have a professional profile that must meet the investors partners because they generally seek to consolidate their brand and do not want to risk with the closure of the franchises due to failure. Therefore, the investor must comply with the profile established by the company before applying for the purchase of the franchise. You can see the most profitable franchises of Soluciones Empresariales.

Toy Company Franchises

Toy franchises in Spain are considered a reference sector. This is due to the fact that the products they offer are very varied and of very high quality, offering a very careful design, with a strong trend in educational values and which also surpass the strictest quality controls in the market, throughout the entire production chain.

The sector is also marked by seasonality so there are dates in the year such as Christmas when demand increases exponentially. This business is aimed at investors looking for a safe sales space, constantly booming and moving.

One of the disadvantages of this franchise is that there are spaces in the year in which the sales are low, in addition the unitary profitability is lower and the operating profits of the franchise are shared between the franchiser and the franchisees, which does not happen if a toy store is opened on its own. You can see the most profitable franchises of Toy Companies here.

Lens and Optics Line Franchises

Lens and optical franchises are profitable businesses because fashionable lenses are always sought after by a special public in taste for style, branding and innovations in this business field. It is a specific type of audience that sees the lenses as a complement in dressing and personality.

This business is advantageous for those investors who like optics and innovation in lenses, frames, colors, designs. A disadvantage of it is that it needs marketing strategies and if they are not included in the entry fee, it will be an extra expense that the entrepreneur will have. You can see the most profitable Optical and Lens franchises here.

Marketing and Advertising Franchises

Nowadays almost no business company can do without marketing and advertising because it is isolated from the business space. That’s why this aspect is fundamental if you want to stand out a business and obtain the expected profits.

Hence, it is a niche market with ample scope for expansion and profitability.

It is aimed at businessmen and IT and network professionals. A disadvantage that the marketing franchise may have is if the person who hires the service does not obtain the expected results in the time in which it was guaranteed that he would do so because, there is a risk of obtaining a low reputation and being discarded by the public that demands the service.

Because, this is considered one of the most critical and sensitive issues of the management of a central business.

The problem can become even more complicated when a parent company retains a percentage of royalties and costs to the franchises for this concept. In addition, all marketing and advertising strategies are based on three concepts, as they are: Strategies for attracting, expanding and retaining customers. You can see the most profitable Marketing and Advertising franchises here.

Medical, Health and Geriatrics Franchises

These franchises are expanding and offer great business opportunities with large profits because the current consumer is more interested and motivated to take care of aspects of health and aesthetics.

Therefore, he shares the interest with his closest relatives. Likewise, the population of older adults is increasing more and more in different countries.

Hence, health services are a profitable business opportunity to invest. One of the advantages of these franchises is that due to the model, interested investors do not need to be doctors or have previous experience to be part of the industry.

However, a disadvantage of these is that you must be aware that even if you acquire a health franchise, the investor is not the owner of the brand and is limited and subject to the guidelines of the parent company leaving little freedom of action. You can see the most profitable franchises of Health, Medicine and Geriatrics here.

Online Messaging and Payment Franchises

The outsourcing of this franchise is demanded by almost all levels of the production chain. Since it offers the delivery of mail, parcels, shipments at all levels so it requires efficiency and quality in the service provided.

Recently this franchise spaces have expanded to payments of services, remittances and money. The franchise can grant important profits if one knows how to manage and guarantee a service of high quality and security. Likewise, the costs of the service depend on the time of delivery to the destination, the weight, the volume, among others.

A disadvantage of this franchise is the time that elapses between receiving a package or shipment and arrival at destination, because several days may pass between the time the order is selected to be scanned, marked, securely packed and shipped.

Then there is the process to destination until it reaches the hands of the receiving customer. You can see the most profitable franchises of Online Messaging and Payments.

Franchise Furniture and Home Solutions

This business is aimed at buying and selling furniture, objects, designs and solutions for home decoration, institutions, offices, hotels, with stores located in large cities, a wide demand and acceptance, with a broad portfolio of customers, broad recognition and prestige.

The investor franchisees obtain ample benefits from a market already consolidated with brands created and worked of great value and credibility. One of the disadvantages of these franchises can be the payment of entrance fees, royalties, exclusivity pacts that can, at a certain moment, limit the diversification of the business. You can see the most profitable franchises of Furniture and Home Solutions here.

Hotel Franchises

With the financial crises in the countries have established more in the market franchises of hotels and hostels, with greater flexibility in management. Being a little more manageable than large hotels due to the consolidation of the brand through the franchise. With the franchise you get the management methods, recognition, operability.

In this sense, hotel franchises are aimed at investors who like the challenge of being different, opting for design, comfort, novelty and dynamism. A disadvantage of hotel franchises is that the franchisee is obliged to provide the quality of service indicated and established by the hotel brand and must maintain all the agreements established by the hotel chain in the contract. You can see the most profitable franchises of Hotels here.

Hair and Beauty Franchises

These franchises are a good option for economic independence and self-employment, widely demanded due to the type of service they provide as it is requested throughout the year, with high portfolios of customers who have preference and loyalty for taste, style and fashion.

It does not require great knowledge to open a business of Hairdressing, Aesthetics and Beauty, as long as you select the professional staff that can provide a comprehensive service of very high quality and customer service.

A disadvantage of this franchise is that those who work in these centers of aesthetics and beauty must be people of great professionalism, ethics and knowledge. Because you must be very sure when applying the specific methods to avoid the risks of damage that may be detrimental to the prestige and brand carefully built by the company. You can see the most profitable Hair and Beauty franchises here.

Restaurant and Food Franchises

These franchises are booming due to the new demands of increasingly informed consumers who want to eat healthy to take care of food, but prefer to do so without the effort of having to spend time at work or other activities in the kitchen.

The franchise is aimed at entrepreneurs and investors who like the service of food, good food and cuisine. This business provides ample benefits and profits once you have a loyal and secure portfolio of clients.

One disadvantage is that the different franchisees must periodically report to the franchise owner, and the franchise owner must ensure that all the different franchises work in the same way. Having a strict vigilance to ensure the proper management and development of the place. If the franchisee does not comply with the contract, it can be terminated and lose the investment. You can see the most profitable Restaurants and Food franchises here.

Vehicle Services Franchises

Car franchises will always be booming and are a safe and highly profitable investment because the public is continually demanding all kinds of services for cars, especially in the maintenance of windows, headlights, brakes, engine, injectors, car cleaning, among others.

This investment is aimed at entrepreneurs who want to break into self-employment and are willing to provide a very high quality service and customer service. A disadvantage of the franchise are the investment costs that can be quite high and require the financial help of a bank or other entity. You can see the most profitable franchises of Vehicle Services here.

Supermarket and Food Trade Franchises

These franchises are considered the most powerful and strongest in the market, not only in this area but also in the economy in general. They are stable franchises and there are them for all socioeconomic strata.

It is considered that 30% of the turnover of the food franchisee is concentrated in this type of franchises, generating a high number of jobs.

These are aimed at any entrepreneur or investor who is looking for alternatives to their professional work, as well as those who wish to diversify their investment.

A disadvantage of these franchises is that they require a series of procedures and permits for the hygiene and handling of food. Also the inventory related to the problems of space and operative that it represents. Increase in the cost of personnel, disorientation of the client if the offer is diversified too much because the brand and the initial image of the franchise can be distorted, among others. You can see the most profitable supermarket and food trade franchises.

Mobile Telephony and Telecommunications Franchises

Today, having an intelligent mobile phone, a laptop, cable television, among other technologies, became part of the lifestyle, the economy and even the employment of many people. Being without these devices can mean isolation and backwardness for an important mass of the population. Therefore, the franchises of mobile telephony and telecommunications are increasing and it is a market of high profitability and stability.

For these reasons, more and more entrepreneurs and investors are seeking to enter the mobile telephony and telecommunications market. It is currently estimated that almost half of the market dividends are occupied by small and recent brands that at the beginning of the century only determined 20% of the total.

One of the main innovations in the telephony franchise sector today is the commercialization of reconditioned mobiles, which has recently doubled very successfully and is at the level of the purchase of new terminals. These franchises are aimed at professionals and investors who know the field of information technology and its broad advance.

The advantages of these franchises is that being a dynamic market, changing, innovative and highly preferred by the public, the profits are quite high. One of the most important disadvantages is the termination of mobile subsidies by operators.

Another disadvantage is that, at present, the client does not want a permanent contract nor does it want to be tied down with any particular company. As a result, the operator no longer concentrates on attracting customers and builds customer loyalty. This forces them to introduce new products and to be more assertive with offers to the client. You can see the most profitable mobile telephony and telecommunications franchises.

Specialized Shops Franchises

These stores offer products and services for a very particular public with specific lifestyles and tastes.

In them are gestating specialized projects with appreciable projections, such as the sale of comics, specialized products of marijuana, flower shops, lighting and LED bulbs, vending machines, urban tribes, curiosities among others. Also, attention should be directed to the brands that explore the field of emerging opportunity products.

Similarly, these franchises can include the purchase and sale of second-hand items are a business area that has been growing around the world. The growth and development of the consumer society allows a substitution of products that are still useful.

The brands of sweets and gifts are also advancing at a good pace, with the support of consolidated companies and business models that are catalogued as contained investments.

This specialized store business is aimed at entrepreneurs who are interested in negotiating products and services for a different audience. A disadvantage of this franchise is the fact that it must be very clear that since they are specialty stores, they are not the only ones.

Basic Franchise Terms

now let’s talk about what franchise agreements generally cover the following terms most commonly used to understand which come into each franchise

An assigned territory
When the franchise is sold to a particular territory it means that the contract and agreement sets out detailed conditions under which the franchisor may not place another franchise or similar business that can compete with the franchise that has acquired that territory. The exclusivity of that commercial space and clients acquired by the franchisee is established.

A duration in the agreement and contract of the franchise
Generally the time allotted for the franchise business agreement is 10 years, however it may vary depending on the type of business. Also, the duration of the franchise is estimated according to the initial investment of the franchisees and the amount of time it takes them to generate a sufficient return on the initial franchise investment and the development obligations of the franchisee.

A franchise fee and an anticipated total investment
It refers to the fact that through the investment in a franchise it is possible to determine the capital required and it will always be possible to estimate the value of the investment, with the possibility of obtaining financing in a more secure manner.

Involves trademark, patent and use of signage
The value of the trademark and the service mark represent an important support for the franchisee. Therefore, a brand that is strong and credible from all points of view, including the legal one, should be selected.

With the signing of the contract it is expected to obtain the royalties and other charges for the use of the registered trademark.
In exchange, the franchisor obtains for the use of his registered trademark, the royalties and other values that compensate him for the continuous support to the franchisee, and for the right that he has granted him to use his already consolidated system to do business and sell his products and services.

Therefore, when a franchise is acquired in addition to a well-known brand name and proven prestige, extensive benefits are obtained that are not available to the entrepreneur when he starts a business from the beginning.

Perhaps one of the most interesting aspects of a franchise is that it is a proven system of operation and training. New franchisees can avoid different mistakes that are usually made because the franchisor has perfected the day-to-day operations in advance through trial and error.