You have probably been hearing a lot about franchising lately, but you might not be quite sure what it is exactly. Here is everything you need to know about franchising.
First, what is a franchise? Basically, franchising is one way a business can grow by licensing their trademark and trade name to entrepreneurs who are looking to own their own business. In franchising, the person or company who grants the license to a third party for conducting a business under their marks is called the franchisor. The third party who will see the products and services of the franchisor is referred to as the franchisee.
The franchisor will also typically provide the franchisee with a business model to follow as well as branding materials and ongoing support.
In general, there are two types of franchising relationships: business format franchising and traditional or product distribution.
Business Format Franchising
Business Format Franchising is the most common type of franchising relationship. Here the franchisor not only provides the franchisee the license to use its trade name and sell its products and services, but will also provide an entire operating system and direct support including site selection, training, operating manuals, quality control and brand standards.
Traditional or Product Distribution
When it comes to traditional or product distribution franchising, the focus is just on the products manufactured or supplied by the franchisor to the franchisee. This is more common in certain industries like the automobile industry, bottling manufacturers and the gasoline industry.
A Contractual Relationship
Whichever type of franchising opportunity you decide to go into, the most important thing to realize is that it is a contractual relationship between the franchisor and franchisee and there are specific requirements that must be met. In the United States, the Federal Trade Commission oversees the franchising industry.
The franchisee is expected to pay a specific financial agreement that includes a franchising fee and an ongoing royalty fee to have the right to use the franchisor’s trade or service mark and to take advantage of all the support the franchisor is willing to offer. Keep in mind that the franchisee is completely responsible for the day-today management of its business.
Each state’s definition and requirements for a franchise might vary a little so be sure to do your research before making any final decisions.
Besides the contract, other important aspects of franchising include the relationship between the franchisor and franchisee, the brand and systems and support.
Without a strong trusting relationship between the franchisor and the franchisee, success is just a pipe dream. A franchisee needs to trust that the franchisor will deliver on all the support he or she promised and the franchisor must have confidence that the franchisee will not only be able to meet all financial requirements that they will also follow all brand and operating standards. If either side doesn’t meet their obligations or are very difficult to work with, the franchising relationship just won’t work.
Both the franchisor and the franchisee need to also be committed to protecting the brand because inevitably it is a business’ brand power that draws the customers in. As a franchisee, you are expected to always provide quality products and services so you can develop a loyal customer following.
When you are researching franchisors, make sure you get a good idea of what type of support he or she will offer you. Typical services offered include:
- Site selection and site development assistance
- Training for you and your management team
- Ongoing Management support
- Marketing and advertising support
- New product development and research
Why Choose Zac’s Burgers?
Burger franchises are one of the most popular franchises out there because they offer the comfort food we all crave. And Zac’s Burgers is one of the top burger franchise to own.
Zac’s Burgers is a family-oriented burger franchise who is currently located in the Philadelphia area and is looking to expand. We are known for our quality food, top notch service and friendly atmosphere. An initial investment in Zac Burger’s will cost you anywhere between $119,500 and $198,000 with no requirements for net worth or liquid assets, although you will need to have at least $35,000 on hand for the first 3 months for additional costs. If you want to get into the burger franchise business and you have never owned a business before, this is a good first investment because of its low startup costs.
At Zac’s Burgers, we also have a strong food truck business that you can get involved in if running a food truck is more your speed. Zac’s will help you every step of the way, from purchasing your food truck, to outfitting it, to getting you road ready. Here is more information on Zac’s Burger Bus.
Zac’s Burgers menu includes different types of burgers (hamburgers, cheeseburgers, bacon hamburgers, bacon cheeseburger, bacon mozzarella cheeseburgers, mushroom and swiss burgers, Zac’s double burger with cheese and veggie burgers. Zac’s also offers wings, chicken sandwiches (fried, grilled, buffalo fried, buffalo grilled, grilled chicken caesar), flounder sandwich, crab cake sandwich, hot dog and hot sausage sandwich.
For the more health conscious, there are also plenty of salads on the menu like Erin’s Favorite Fried Chicken Salad and Pete’ Greek Salad, BLT salad and Buffalo Chicken salad.
As a Zac’s Burger franchisee, you can also sell other burger joint favorites like chicken fingers, French fries, waffle fries, sweet potato fries, onion rings, mozzarella sticks and thick hand-dipped milkshakes.
In addition, as a member of our Zac’s Burgers family, you will get to take advantage of all the training and support it offers as a franchisor. They pride themselves on offering exceptional opportunities with no hidden costs or surprises. They want you to do well so they will help you every step of the way, including with advertising and marketing and planning for your grand opening.
Franchising can be a great investment if you choose the right fit. Want to learn more about the question, what is a franchise? For more information about our franchise program, call us or send us a message today.