What Is Franchising?

Franchising is a marketing strategy where a network of inter-reliant businesses allows people to share brand recognition with a winning approach of doing business and a proven marketing and allocation system. It’s a practice of using a firm’s successful business model and brand for an agreed time period.

Most people think franchising as food related industry, but there are many other kinds of franchising. It’s an ability to deal out with specific products/services with a proven business strategy. The parties involved in franchising are franchisor and franchisee, where the business owner (franchisor) sales the use of business rights and strategy to franchisee (independent people) for an upfront fees and on-going royalty payments. The benefit of having a franchise is that your potential customers are inevitably known with the brand – means more brand recognition.

In a nutshell, franchising provides small businesses (the franchisees) with the tools of big businesses (provided by the franchisors).

What Do You Need to Know Before Buying A Franchise?

There are many factors you should consider before making a decision of making a franchise purchase and finding franchise financing.

  • Do you really have the desire, passion, time, and money required to manage the franchise business?
  • Does franchising is the best way to start a new business for you?If you’re unfamiliar with direct sales marketing, than franchising is not for you.
  • Do you conclude how much risk you can afford before buying a franchise?
  • Do you study the consumer market demands for the franchisor’s products/services?
  • Do you review the franchisor’s business performance, financial strength, franchise fee and on-going royalty payments, and franchisor’s financial interest in franchising?
  • Do you thoroughly study the terms of proposed legal agreement of franchising?
  • Have any thought about the franchisor’s expansion plans, market research abilities and the people selection criteria?

Types Of Franchises

Many business models can be used as franchises such as store chains, family restaurants etc. There are four major franchises types and each type operates in a different way. The franchise types can be classified according to different factors like, the franchisor’s business strategy, franchisor involvement & control, franchisee expansion options in the granted territory and the type of franchise business. These factors can extend beyond in many cases, and it’s difficult to follow a single definition for a type of franchise in regards to real life instances.

The four main franchise types are area developer franchises, tax-service franchise, master franchise, and single-unit franchise.

Sources of Available Franchise Financing

There are many sources of Franchise funding. Some common sources of franchise financing include private online lending, SBA loans, loans from loved ones and traditional bank loans. Some franchise concepts will even help you to find preferred franchise lenders that have historically been worked with franchisees. Getting a franchise loan is as easy as eating a pie provided that you have a strategic business plan, great business credit, and good experience in the industry. If you have these attributes, getting a franchise business loan shouldn’t be a problem from banks or other lenders. See how Merchant Advisors helps Franchisors and Franchisees easily get franchise financing to operate franchise business proficiently.

Franchising your small business is the best way to get into business and grow quickly. Before searching for franchise financing, it’s better to have your questions answered first. Before opting for franchising you should understand its facts and how to get it started effectively.

You will find numerous business opportunities in the world of Franchising. Every person wants to have the next Starbucks, Wendy’s or Taco Bell franchise – the best opportunity that can get you a secure business career. But gaining that opportunity isn’t as easy as it sounds.

How To Get That Opportunity Started?

Because of the business credit crunch in 2008, many small businesses have been affected. They have to look for alternative funding sources to get started. Fortunately the financial industry has developed technology, such as Merchant Advisors, that helps potential borrowers like you to get fast franchise financing to fulfill their dreams of having a business of their own at better rates and flexible terms. Whether you need a franchise loan from bank, merchant cash advance financing or asset based financing, Merchant Advisors can help.

The online lending platform in the business financing industry has permitted business lenders to assist small businesses resourcefully while also guiding lenders that are eager to fulfill the working capital needs of borrowers like you.