{"id":3289,"date":"2021-02-25T21:24:57","date_gmt":"2021-02-26T02:24:57","guid":{"rendered":"https:\/\/zacsburgers.com\/?p=3289"},"modified":"2021-05-06T07:59:25","modified_gmt":"2021-05-06T11:59:25","slug":"franchising-101-terms-facts","status":"publish","type":"post","link":"https:\/\/zacsburgers.com\/franchising-101-terms-facts\/","title":{"rendered":"Franchising 101 Terms & Facts"},"content":{"rendered":"\r\n
For those of you looking to get into the world of franchising<\/a>, it can be overwhelming at the beginning. However, rest assured, once you know all the lingo and facts it is pretty straightforward to get going. Franchising can be very rewarding and make you a successful business owner.<\/p>\r\n\r\n\r\n\r\n A franchise is a brand or company where an investor has bought the rights to its use. The brand gives the license, support, and marketing. The investor runs the day-to-day activities and manages the place.<\/p>\r\n\r\n\r\n\r\n Franchising is a large part of the economy, offering over 18 million jobs and generating about $2.1 trillion to the economy in The United States. There are currently about 825,000 franchise opportunities and businesses. They cover about 300 industries which means there is virtually any industry that everyone could be interested in.<\/p>\r\n\r\n\r\n\r\n A franchise can be a restaurant, a fast-food joint, a hair salon, a gym, and many many others.<\/p>\r\n\r\n\r\n\r\n Before investing in a franchise<\/a>, it is always a great idea to talk to current and former franchisees. Keep in mind they will not able to give out sales numbers or earnings information as this is confidential.<\/p>\r\n\r\n\r\n\r\n Most companies have an option to get started by inquiring on their website. They will provide contact information and other basics about what you can expect. You can then set up a meeting to determine the exact requirements.<\/p>\r\n\r\n\r\n\r\n Once you know the terms that are commonly used in the business, you will sound like a pro when discussing your franchise opportunities.<\/p>\r\n\r\n\r\n\r\n This a person who buys or invests in a franchise to become an owner of the business.<\/p>\r\n\r\n\r\n\r\n A business or company that wants to expand their outreach by franchising. They offer investors an opportunity to run a whole location or just one singular branch.<\/p>\r\n\r\n\r\n\r\n A business that used to be independent, but joined a franchise system in order to capitalize on the other brand and be able to use their systems.<\/p>\r\n\r\n\r\n\r\n The master franchisee is in charge of recruiting new franchises and also giving them the support and the training that they need to be successful. They usually are in charge of a very large location or a whole territory.<\/p>\r\n\r\n\r\n\r\n When you purchase and set-up a franchise, you have to pay several fees. The franchise fee is given to the franchisor and it allows them to officially become a franchisee.<\/p>\r\n\r\n\r\n\r\n This is usually a percentage of monthly franchise sales that is given to the franchisor. Some franchisors offer a flat fee as well.<\/p>\r\n\r\n\r\n\r\n This is when the franchisor makes a commitment to limit the number of competing locations near the one you are starting. This is important as you do not want another franchise close to you. If you are the only one in a particular town or territory, you are more likely to make money and create loyal customers.<\/p>\r\n\r\n\r\n\r\n A franchise broker will help you pick a franchise that best suits your interest, location, and budget. Some will just help you determine a good choice, while others will actually help you make the sale and complete all the paperwork.<\/p>\r\n\r\n\r\n\r\n This is when a potential franchisee will visit the company headquarters and meet the franchise team. This is the day you will be able to actually meet the people you could potentially work with. It is a great time to see the business operations and decide if they meet your criteria. After this day, it will be easier to make a decision about whether you want to move forward or not.<\/p>\r\n\r\n\r\n\r\n This is an association<\/a> dedicated to helping you break into the franchise industry. They are based in Washington DC and will help anyone who is researching, buying, or starting a franchise.<\/p>\r\n\r\n\r\n\r\n This is required at both the federal and state level. This is all the paperwork where the Franchisor will disclose the information about the franchise offer, the company, and the network. Of course, always make sure to read it carefully and know all the details before accepting or signing.<\/p>\r\n\r\n\r\n\r\nFranchises Definition and how you can get involved<\/h2>\r\n\r\n\r\n\r\n
Some terms to know<\/h2>\r\n\r\n\r\n\r\n
Franchisee<\/h3>\r\n\r\n\r\n\r\n
Franchisor<\/h3>\r\n\r\n\r\n\r\n
Conversion Franchise<\/h3>\r\n\r\n\r\n\r\n
Master Franchisee or Sub-Franchisor<\/h3>\r\n\r\n\r\n\r\n
Franchise Fee<\/h3>\r\n\r\n\r\n\r\n
Royalty Fee<\/h3>\r\n\r\n\r\n\r\n
Protected Territories<\/h3>\r\n\r\n\r\n\r\n
Franchise Broker\/Consultant<\/h3>\r\n\r\n\r\n\r\n
Discovery Day<\/h3>\r\n\r\n\r\n\r\n
International Franchise Association (IFA)<\/h3>\r\n\r\n\r\n\r\n
Franchise Disclosure Document (FDD)<\/h3>\r\n\r\n\r\n\r\n