What Is a Franchise? | Evergreen Franchise Advisors

With years of experience helping people find the perfect franchise opportunities for their abilities and situations, we sometimes forget not everyone knows as much about these businesses as we do. In reality, there are a lot of details about them that many people don’t know or misunderstand, so we thought it might help if we give a little explainer.

What we’re presenting here isn’t every detail about franchises, nor will every detail necessarily apply to every opportunity and situation. Still, this should give you a better idea of what a franchise actually is and what it could mean to be part of one.

Franchisees vs. Company Stores

One of the first ways this type of business setup gets confusing is with the concept of company stores. While not every franchisor (the parent organization) owns a portion of the locations, many do have a core still controlled by the corporate entity.

In many cases, those include some of the first stores opened by the company, while some are just in areas where the company’s leadership saw strategic opportunity.

One Company, Multiple Operators

Franchisees are those to whom an operating license and rights to use a trademark are sold by the company that allows them to open a location of the business. They operate under the same name and business plan, but they have autonomy, sort of like regional managers but with a lot more skin in the game since they have money invested.

This independence is why commercials for limited time offers at chain restaurants typically include the disclaimer, “Prices and participation may vary.”

Can Another Store Open in My Area?

In most cases, your license with the franchisor will grant you exclusive rights to operate as part of the company, with the license often defined by a specific geographic area. That means no one else can open another location of the same business within your territory, though other similar concepts can move in.

What Does the Franchisee Get?

As noted above, franchisees get to be part of an established business in exchange for paying licensing fees, royalties and other costs. With that they typically receive business plans, management tools, the benefits of any companywide marketing and participation in a concept that has proven successful.

They may also benefit from market research on their area conducted by the company and, in some cases, administrative assistance, ongoing training, and bulk-buying discounts for regular purchases, among other things.

Does the Franchisee Own the Business?

Yes. While the level of control exerted by the company varies by concept, the local store is owned and operated by the franchisee or the business entity he or she establishes.

The experts at Evergreen Franchise Advisors are eager to put years of experience to your benefit answering any other questions you may have about being a franchisee. For a partner that can help you get started with a great opportunity, schedule your free consultation with us today!