Franchising offers many advantages for both franchisors and franchisees. When you look at the facts, it’s easy to see why franchising is the popular choice for entrepreneurs.

A History of Franchising

The franchise business model is unique. It is one of the most widely used business models across the world today.

In basic terms, a franchise is the granting of a license or right to an individual or group with the intent to market a company’s goods or services in a particular area or territory.

While early concepts of franchising date back to the middle ages, franchising first appeared in the United States in the mid-19^th Century. One of the earliest, and most successful, examples of franchising was when John S. Pemberton licensed his home-made drink to selected people to bottle and sell, a product that became known world-wide as Coca-Cola.

Other early examples of companies who took on the early concept of franchising include the Singer Company, General Motors Corporation, Chevron and Rexall Drugstores.

However, the modern concept of franchising, as we know it today, emerged with popularity in the 1950s and 1960s. It was most notably in the restaurant industry, with the likes of Ray Kroc and his McDonald’s concept and Colonel Sanders with his Kentucky Fried Chicken, that franchising became a popular way for businesses to expand and for entrepreneurs to become business owners.

Franchising Statistics in the U.S.

According to the United States Census Bureau approximately 10 percent of all business establishments in the U.S. are franchise establishments. The total number of franchises in the U.S. have been growing steadily since 2013, totalling a little over 745,000 in 2017.

It was estimated that in 2016 more than 7.5 million people were employed in a franchise business, with franchising creating an economic output of US$676 billion.

“One of the most significant statistics of the franchising business model is that, according to Entrepreneur Magazine, franchising has a higher than 90 percent success rate,” said Derek Cafferata, CEO and President of franchising experts All State Franchise Finders. “Making it one of the best business models to invest in.”

Benefits of Franchising

For the franchisor, franchising offers a number of significant benefits when it comes to growth and expansion, whether locally, nationally or internationally. According to Derek Cafferata, probably the most significant benefit for the franchisor is that they do not have to carry the cost or risk of opening multiple locations, especially when looking to expand into a foreign market.

For the franchisee, a franchise offers the best of both worlds.

“One can become a business owner without the major risks associated with an independent start-up,” said Derek. “You get to take advantage of all the set-up, business processes and systems, training and support that a quality franchise has to offer.”

Franchise Ownership Options

A number of different ownership options are available. A single unit ownership option is ideal for new business owners. It involves the franchisee owning, as its name suggests, one single location that can usually be managed by one person.

A multi-unit ownership option allows the franchisee to own more than one location. The up-front investment is higher than a single unit ownership, but it does allow for fast and cost-effective growth.

Franchisees have the option to purchase an existing franchise, where they take over ownership of a business already up and running.

An area development ownership option is similar to a multi-unit ownership, but on a larger scale. An area developer usually covers a large geographical territory and is tasked with the responsibility of opening up multiple units in quick succession.

The master franchise ownership option is similar to an area developer but takes on the sole responsibility of franchising into a large territory. A master franchisee also becomes a franchisor to those franchisees who he or she brings on within the business.

All State Franchise Finders

Franchising is one of the most successful ways for any entrepreneur to become a business owner. Whether you are considering a small single unit ownership, or you wish to consider the choice of multiple units or a master franchise, the team at All State Franchise Finders can help guide you through the daunting process of selecting and purchasing a suitable franchise opportunity.

With more than 30 years’ experience in the franchising industry, Derek Cafferata and his team at All State Franchise Finders are here to help you. Contact 1-800-544-2161 or visit allstateff.com today. All State Franchise Finders – Your franchising experts!