The History of Franchising
The concept of franchising has been around for decades. Franchising began to attract widespread market attention with the evolution of the McDonalds franchise system which was started by Ray Kroc in 1955. Since the opening of the first McDonalds in Des Plaines, Illinois, franchising has continued to gain popularity.
Franchising is one of the most popular systems for growing a business in the United States today. According to a recent government survey, franchising has experienced explosive growth since the mid 1970s and is expected to continue phenomenal growth into the future. Here are a few facts about franchises:
- In the United States , there are over 2,500 franchise systems.
- These systems have in excess of 534,000 franchise units, which represent 3.2% of the total businesses in the United States .
- Franchises represent over 35% of all retail and service revenue in the U.S. economy.
- More than 7 million people work for owners of franchised businesses.
- More and more people are making the decision to get involved with a franchise company with the hope of pursuing the American dream of business ownership.
An Overview of the Franchise Concept
The concept of franchising is simple. It is a method of duplicating successful business processes and building on systems proven to be effective for acquiring and keeping customers. Through replication of systems and processes within a franchise, a certain level of consistent performance can be achieved. This consistency helps to build a positive and reliable image in the minds of current and future customers which tends to provide franchise operators the luxury of quicker increases in sales as compared to non-franchise counterparts.
Benefits of Franchise Ownership
In addition to enjoying a quicker ramp-up in sales on the average, franchises offer other significant advantages over other entrepreneurial options.
Most franchises offer extensive training for the franchise owner. This training is usually provided as an initial structure program (including a standard classroom-type format at the corporate location), and ongoing training through formal or informal methods. Training material often includes step-by-step guidelines for how to conduct every part of the business. Forms and other tools are usually provided to give the new franchise owner a clear roadmap toward replicating the successful process. Most franshisors also provide ongoing training by regional or national trainers, throughout the relationship with the franchisee. And, most franchisors also provide training for the franchisee's staff/employees/managers.
Leveraged Purchasing Power/Performance Tracking
As a member of a larger organization of franchise owners, franchises typically have benefits associated with larger volume discounts with regard to buying goods or services. Performance metrics are normally provided by the Franchisor to provide franchise operators with benchmarks from which to gauge individual performance, and access to best-in-class ideas to help refine the operating performance. Most franchisors provide each franchisee with clear guidelines and business/operating plans, covering topics such as: purchasing; cost of goods controls; decorations/leasehold improvements; employee recruiting/training/retention; accounting/bookkeeping; operating costs control; operating systems; premises design; signage; premises maintenance; equipment acquistion/maintenance/repair; and many other important business management elements.
ABMI, having helped thousands of entrepreneurs/buyers find their "ideal deal" business investment, not only lists and sells non franchise independent businesses, but also represents a limited number of franchise opportunities. And, we've matched many buyes with a franchise of the buyer's choice, over the years.
Variety Of Franchise Investments Possible
Entrepreneurs interested in investing in developing a franchise business may choose from several exciting options;
Some franchisors offer to help you establish a single franchise business. Some offer to help you gain the rights to a multiple location"chain" of business locations. Some offer "Regional Franchises", or "Master Franchises", that allow the franchisee to control a larger geographic territory, and the rights to the franchise opportunities in that territory. Some territory opportunities are for an entire metro area, or a state, or multi state territories. Obviously, the larger size opportunities can be likened to a personal "empire" of ownership.
Some franchises are simple, home based opportunities. Some can be established in a conventional office location. Others are retail businesses you can place in a strip shopping center, or in a busy mall location, or in a free standing building. Some can be located in an industrial park/warehouse location.
Some franchises are "service" businesses, that utilize little or no inventory. Others are businesses that require a substantial investment in inventory.
Some franchises require little or no investment in equipment. Others might include a substantial investment in equipment.
With the huge variety of franchises available, most buyers can find one that matches their personal needs, desires, hopes, interests, and income expectations.
When a buyer chooses a franchise start up business opportunity, ABMI provides the following services to the buyer, at no cost to the buyer: ABMI introduces the buyer to a variety of franchise opportunities that could line up with the buyer's interests; ABMI arranges for the buyer to communicate with representatives of the franchises the buyer shows some interest in; when the buyer signs a Franchise Agreement with a franchisor, ABMI volunteers to help the buyer arrange the financing needed to not only purchase the franchise, but also the funds needed for equipment, inventory, leasehold improvements, operating reserve capital, loan origination fees charged by the lender, and the funds needed to help the buyer finance a "turn key" operating business; ABMI's affiliated real estate company, Business Realty, Inc, volunteers to assist the buyer with finding and securing a lease on a location for the business, and/or assits the buyer in purchasing the real estate/premises for the business; ABMI manages the tasks related to the due diligence, leading up to the final closing on the transaction, including cooperating with the buyer's attorney, accountant and othe advisors, to insure an orderly, organized, "clean" transaction. There is no extra cost to the buyer for these valuable services.
To arrange a no cost, no obligation consultation about franchise opportunities, you may phone ABMI at 913-341-6300 or register with this ABMI web site and we will contact you.