You are an unhappy office staff, toiling more than ten hours a day, and noticing playing by the rules does not give you what you really wanted and it only made you old and busy.

Going entrepreneur came into your mind. But, with all those news about traditional businesses closing left and right, the terror stop you from taking action.

However, you find in the newspapers, in the TV and in the internet, firms offering franchising. Maybe this is the type of business for you. And you are intrigued. You ask yourself, what is franchising, anyway?

This blog post will tackle the definition of franchising.

Franchising is a practice where an already established allows another entity to use the company’s already successful business solution. The franchisor (the company that provides the business solution) and the franchisee (the entity that uses the business model) enter into a contract to use and capitalize on the companys successful business model and/or its existing brand awareness (most often called Goodwill) for a faster return of investment.

In return, franchisees expend two payments in general. First is a one time investment, called the franchise fee, and the second is royalty fee, which is a recurring expense, for the continuous usage of the business model, advertising and training costs. Royalty is usually 3-10% of gross profit.

Franchising is a interconnected network of mutual business relationships that permits a number of people to share:

– A brand recognition

– A successful method of doing business

– A proven marketing and distribution system

Thats pretty what much franchising is.

One common misconception about franchising is the phrase, “I am buying a franchise”. You are not buying; you are investing onto the business. What you will own are the physical assets that are needed to act upon the franchise, like the building and equipment.

For a business to work as a franchisor, it must have a good track record of being profitable and the business model it employs is easily duplicable. Otherwise, that business is not suitable for franchising.

What’s so great about franchising?

For the franchisor, the company can grow and gain more chains while lessening the traditional risk and liability of doing so. It is also a great way to gain more brand recognition and reputation.

For the franchisee, they are capitalizing in an already proven business model and recognized brand. In fact, a franchising business is 90% proven to be successful. With a success rate like that, who can go wrong?

There are many ways by which entrepreneurs get on the road to success. Some entrepreneurs choose to take advantage of franchise opportunities and from there, move on to greater glory.

There are a lot of things that can be said about franchising. For one thing, franchise opportunities let you penetrate the market with an already-established brand name. People already know the product or service so you won’t have to go through the trouble of making a name.

Of course, you have the responsibility to make a name for your business and not just the product. This means you’ll have to sell yourself. After all, people can get the product or service from other franchises, so what makes you any different? You’ll have to show them that you are different from other businesses even if your products are the same. You’ll have to do your best to convince people that getting the product from you is the best decision that they can make.

If you don’t think that taking advantage of a franchise opportunity is the thing for you, maybe you should consider starting a small, home based business.

A lot of budding entrepreneurs put up small home based businesses for different reasons. Here are some of them:

1) Lack of funding – most entrepreneurs have small home based businesses because of the simple fact that, as a beginner, most do not have the funding to rent office space.

When you think about it, a small home based business is perfect for a budding entrepreneur. He or she actually gets to save money on the rent of commercial space. We all know how hard it can be to manage finances when you are starting a business, so saving all the money you can is a very good idea.

2) Convenience – for entrepreneurs, small home based businesses can be very convenient. When you think about it, they can stay at home all day and still make a living.

Entrepreneurs find small home based businesses convenient in other ways as well. Much legality is eliminated when you base your venture at home. Getting a lease on a commercial space may sometimes prove too complicated, as compared to having your business at home.

3) Customer base – some entrepreneurs start small home based businesses because of the fact that they may already have an established client base there. Some restaurants, for example, get started because of a person noticing that his or her cooking is very popular around the community. Now, by starting a restaurant in the home, he or she would already have a customer base, willing to pay her for her cooking.

Many people know just how hard it can be to start your business as an unknown. By basing your business at home, you know that you will already have established connections and you know that people will find it more convenient to go to you for their needs.

Remember that you need to plan properly. Most entrepreneurs’ small home based businesses fail because of poor planning. You need to learn how to separate your business finances from your home finances, and learn how to record each correctly.

Business franchising, in various forms, has been around for decades, and it proves an eternally popular business vehicle for start-ups and for those looking to break out of the 9-to-5 rut. It hosts its own range of advantages and disadvantages, of which it is important to take notice before committing to purchase. Likewise for the franchisor, the business model has notable advantages that many businesses might at some time like to consider, as a more effective way of growing the business over a short period of time.

Business franchising is a less risky way to start a business. If youre considering giving up your job to work for yourself, you might like to consider business franchising options that may be available. Business franchising allows you to run a branch of someone elses business, providing you with a blueprint business plan thats been tried, tested and is successful in other areas. It also gives you an opportunity to benefit from the experience and industry knowledge of the franchisor, which you would otherwise have to gain from your own experiences in business or in the employment arena.

An additional advantage to business franchising is that a number of high street banks support most major franchising opportunities, and are more willing to lend money to cover the franchise fee and start-up costs than they would be with other businesses and enterprises. That means you will be more likely to obtain funding for all your initial costs if you elect to run a business franchise rather than opting to go it alone straight from the off.

For the franchisor, business franchising can be a profitable and useful model to adopt. Firstly, it can raise substantial capital in the form of franchise fees, which can often run into the tens of thousands. This can be used to finance the development of the franchise opportunity, and can also make the promoter of the franchise particularly wealthy. Additionally, many business franchising opportunities also require a proportion of revenues to be paid from each franchisee in royalties, providing an on-going income to the business.

On the business side of things, business franchising allows a business to achieve rapid but controlled growth, which would be simply impossible were it to be effected organically. While it does mean giving up some control of the way the business is run, particularly at an individual franchise level, it nevertheless allows the business to grow geographically and in terms of revenues over a very short period of time. With the right franchisees, business franchising can prove lucrative as well as being an excellent way to prompt and maintain growth.

Considering the advantages of business franchising, it would appear to be a particularly useful model for all parties concerned. While that is the case, its also important to bear in mind the disadvantages, such as the lack of absolute freedom on both sides of the fence and the risk that either side to the deal might turnout to be wrong for the relationship. Nevertheless business franchising will continue to prove a popular way of doing business.