The Business of Your Dreams: Choosing the Right Franchise Type


Franchising is a great way of starting a business. Experts predict new businesspersons will find it easier to start thanks to technology and the internet of things (IoT). Quality control, more engagement on a sales level, and better qualifications are also expected of new franchisees.

New franchisees have a wealth of options to choose from. care for your child, pet, or lawn; a gym, spa, or studio for every fitness goal; a rec center for card games and video game enthusiasts.

The first thing you have to consider when franchising, however, is not the category but the type of franchise that will work for your goal.


If you’re a lone business owner who wants a small franchise to start, investing in a job franchise might be for you. You’ll only need to purchase the minimum amount of equipment and stock to operate. Think of lawn care services, pool maintenance, travel agencies, and food trucks—you’re hands-on all the time and see the fruits of your labor in real-time.

Product Distribution Franchise

Product distribution franchises confer more benefits to the franchisee than a typical dealer. Franchisees receive access to more services and can distribute the franchisor’s product on an exclusive or semi-exclusive basis. Think of auto dealerships: they are authorized to sell cars and use their branding to promote their service. Independent dealers can’t do that because generally, they don’t have a business agreement with the manufacturer to sell cars as an official agent.

Business Format Franchise

convenience store

A franchise model operating under 19 business categories, allows the franchisee to learn the business format of the franchisor. From marketing, and accounting, to personnel handling, the franchisee is expected to replicate the franchisor’s business format down to a T. Business format franchises can cross borders to culturally-similar markets with little legal problem.

Some businesses that operate under this format are convenience stores, hostels and hotels, and quick-service restaurants.

Investment Franchise

Hotels and big-name restaurants also exist under-investment franchising. Under this format, the franchisee invests in the franchisor’s business and either form their own management team or relies on the franchisor to run the business. They do so in the hopes that they’ll produce a large return on investment.

Conversion Franchise

If you have an existing business, you may want to consider dealing with a franchisor to convert it into a franchise. A converted franchise is allowed to use the franchise’s business systems and trademark. Converting your business to a franchise might be in your interest if you want to diversify, change out of an industry, replace lost revenue, and keep your staff.

Once you’ve determined what franchise type works for you, it’s time to start thinking of categories. Know if competition is tight for that category. You wouldn’t want to buy another laundromat if there are already five laundromats in one block. The track record of the franchise is also crucial. A lawn franchising opportunity that you may have overlooked could have been your best bet for success.

Keep a keen eye out on trends and take care of your franchise, and you’re sure to grow.

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