Frequently Asked Questions

    Have you ever wondered if franchising is the right business opportunity for you? AskMrFranchise has the answers in our Frequently Asked Questions page. We provide key information about the basics of owning a franchise and answer common questions related to the 12 relevant franchise industries.

    Franchise Basics

    • What is a franchise?
      Franchises are essentially “boxed businesses”. Typically, when you open a box, everything you are looking for is well organized within it. A franchise is exactly that: a business that has everything needed, compacted, and ready to be opened, unpacked, gathered, and operated. Whether you have previous industry or business experience or not, franchisors provide the training, support, and proven business system needed to operate the business it franchises. Franchising is essentially a simple, quick way to begin a new business. Learn more here
    • What is a franchisor and franchisee?
      A franchisor is a company that licenses its trademarks and right to own and operate business units under its name and likeness to a franchisee, who is an entrepreneur or group of entrepreneurs who buy these rights and run business units under the company’s trademarks and branding. Learn more here
    • What is the history of franchising?
      Perhaps the earliest retail franchisor is Ben Franklin stores, which started in 1920 and began to franchise around that time. The earliest fast-food franchise was A&W® Root Beer, established in 1924, with Howard Johnson® being the first to franchise restaurants in 1935. An early pioneer in service franchising was Arthur Murray® Dance Studios, which got its start in 1938. Learn more here
    • Why do businesses franchise?
      The answer comes down to wanting to grow faster. Franchising permits the founder of a business to rapidly expand their brand more efficiently. A brand owner could not expand as quickly without the franchising system. Learn more here
    • Why own a business or franchise?
      Franchises offer the independence of business ownership supported by the benefits of an experienced, larger business network. In deciding which franchise opportunities to consider the crucial factor is information. What AskMrFranchise provides is a wide-range, comprehensive source of key franchising data and information. With experienced researchers and writers, we consolidate extensive analytics and data to provide users online access to more franchising data than any single online source. Visit our About Us to learn more about what we do. If you are interested in partnering with us, take a look at our Partner With Us page. Interested in what franchise opportunities are available? Check out our client pages to see which entrepreneurial endeavor is right for you. Learn more here
    • What are some of the benefits of owning a franchise rather than an independent business?
      Most business experts agree that franchises have a higher likelihood of success than independent businesses, because a proven business model is already in place, and has been tried and tested. Franchises also offer additional benefits like group purchasing power, brand recognition, and franchisee support. Franchisee support is a critical component of successful franchising. Franchise brands provide initial business start-up assistance ranging from strategic guidance, to real estate selection and negotiation, to access to suppliers and equipment programs, to ongoing training and marketing support. The franchise model works because franchisors are only as successful as their franchisees. Thus, franchise companies provide extensive support to their franchisees to help them succeed. Learn more here
    • What makes a good franchise owner?
      A successful franchise owner is typically someone who is a good leader and communicator, often a team player who enjoys collaborating with others to work towards common goals. Most successful franchise owners want to be their own boss and manage a team or business. Learn more here
    • What is a royalty fee?
      A royalty fee is an ongoing fee that franchisees pay to franchisors, usually on a monthly or quarterly basis. The fee is generally calculated as a percentage of gross sales, though could be a fixed dollar amount as well. Learn more here
    • What is a franchisee fee?
      A franchisee fee is an initial fee paid by the franchisee to the franchisor in exchange for establishing the franchising relationship with them and obtaining some services and support for their business unit. Learn more here
    • What is a franchise agreement?
      A franchise agreement is a legal document that formally create a franchising relationship between the franchisee and the franchisor. Learn more here
    • How are new businesses financed?
      The cost to begin a franchise is disclosed within that franchise’s Franchise Disclosure Document. There are many potential financing options. They are generally described as debt or equity options. Debt is money that is borrowed. Three common types of borrowing include 401k or retirement plan loans, Small Business Administration loans (SBA loans), and Home Equity Lines of Credit (HELOC). 401k loans and HELOC’s are very popular, as they tend to be a relatively quick way to borrow. Equity financing is cash invested in the business that does not have to be repaid. Learn more here
    • What franchise should I buy?
      To determine which franchise is best for them, entrepreneurs should first ask themselves what their business interests are, how much money they have to invest, how involved they can be, and what their own business and financial goals are. After this, they should carefully weigh their options and chose the franchise that suits them best. Learn more here
    • What is a franchise disclosure document?
      A franchise disclosure document (FDD) is a legal document put together by the franchisor that breaks down their business in 23 segments to provide full disclosure on their fees, royalties, expenses, relationship with franchisees, and other important issues. Learn more here

    Franchise Industries

    • Is the automotive industry growing?
      With American families holding onto their cars longer and the number of automobiles in the country at an all-time high, the demand for auto aftermarket services, such as repairs and replacement part sales, is strong and growing stronger each year, especially as cars become increasingly complex and require additional upkeep. In fact, it’s estimated that the U.S. auto aftermarket brought in $273.4 billion in 2017 alone.
    • What is the business services industry?
      Business service franchises provide the assistance needed to help other businesses grow. The business service franchise industry generates an estimated $9 billion each year and is comprised of more than 25,000 different businesses. They include all business type services that a business would need to operate including outsourcing tasks, payroll, staffing, billing, and other supplies and services.
    • How large is the children’s services industry?
      There are more than 35 million households in the U.S. that have children under the age of 18. The childcare services industry generated $27 billion in revenue in year 2017. Furthermore, childcare is one of the fastest-growing industries in the United States, with daycare franchises alone growing at an estimated annual rate of 2.6%.
    • What are the different types of education franchises?
      Education franchises range from tutoring services to disability assistance, camps, sports, training, as well as all other child activities. They have generated over $2 billion in revenue annually. Roughly 2.8 million households used a tutoring service in 2018. With more than 100,000 franchises in operation, the educational franchise services industry continues to rapidly expand
    • Are fitness franchises a good investment?
      Fitness franchises and health clubs have exploded in popularity in recent years across the United States. Fitness franchise revenue grew 122%, from $11.6 billion in year 2000 to $25.8 billion in year 2015. Revenues have grown more than 10% annually since year 2014. Gym memberships surged from 32.8 million in year 2000 to 60.9 million in year 2017.
    • How big is the food & restaurant franchise industry?
      People need to eat, so food franchises for that reason alone are very popular. Sometimes consumers need a fast meal. However, sometimes consumers want healthier meals, so they go with healthier choices when they aren’t eating at home. Food franchises are a longtime staple in the United States franchising industry and likely aren’t going anywhere anytime soon. The fast-food consumption rate has rapidly increased over the past 15 years. Food franchises generate an estimated revenue of $110 billion each year.
    • What are health related franchise businesses?
      Health and beauty franchises include hair salons, beauty and cosmetics, massage services, tanning salons, chiropractic services, personal waxing, and nail salons, as well as other services. In year 2019, hair salons generated annual revenue in excess of $40 billion, beauty and cosmetics stores generated annual revenue in excess of $20 billion, massage services and nail salons generated annual revenue in excess of $30 billion, and tanning salons generated annual revenue in excess of $4 billion
    • What does the home services franchises industry include?
      Home service franchises cover a broad spectrum of tasks and jobs. Services such as decoration, renovation, landscaping and cleaning constitute categories within the home services industry. As with the auto industry, customers are more likely to trust an established franchise for their home services.
    • Are real estate franchises growing?
      In 2019 alone, the U.S. real estate industry generated $53 billion in revenue, a record high in the last 10 years. Real estate franchises include sales and property management, for both commercial and residential properties. The industry also generated 18 million jobs, a number projected to continue rising in the future.
    • What kind of retail franchises are there?
      Shopping and retail franchises include clothing boutiques, hardware stores, discount party stores, and many more brick and mortar store fronts and kiosks. Franchises can connect with local vendors and local community needs. This is a huge advantage that franchises have over the growing e-commerce competition.
    • Are travel franchises popular?
      Travel franchise opportunities offer franchisees the opportunity to operate from home. Franchisees stay in-touch via media, cellphones, and computers. Many trends have influenced and shaped the travel franchise industry of today. Primary among these trends is the growing desire to travel by cruise. 27.2 million people are estimated to use cruises for their form of vacation and travel each year.
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