The four types of franchise business you can invest in

Posted: 10 Jul 2019
Estimated Read Time: in 8 minutes

The four broad types of franchise business you can invest in

The four types of franchise business you can invest in

Always wanted to run your own business, but don’t know where to start? Maybe you’re fed up with the corporate rat race and want to take your future into your own hands.

Investing in a franchise could be the answer. It gives you an existing brand and structure to operate within, as well as training and support to help you build a successful business, for yourself but not by yourself.

To help you understand what’s the right franchise for you, you should consider the different types available:

1. Job or operator franchise

These owner operator franchises are usually home based, which keeps overheads down to a minimum. The franchisee is the key driver of the business, although as the business grows it may be possible to take on staff and step back a bit from the day to day running of it.

Costs are often at the lower end of the franchise range, so they are a good opportunity to get into business without having to take on any property leases or other big financial commitments at the outset. There is a wide range of opportunities in this lower cost bracket, including children’s activities, window cleaning, oven cleaning, van-based sales and delivery franchises.

2. Management franchise

The franchisee manages the business operations, typically with employees carrying out the work involved. These will often be in the business to business sectors.

Your leadership and organisational skills will be relevant to this type of franchise, as you will need to drive the business forward and manage your team. You will often need higher levels of working capital and office premises could be required.

Typical franchises in this category could be in the care sector, expense reduction franchises, commercial cleaning or franchises where you will be managing a team of people delivering the services you provide.

3. Retail and fast food franchises

This type of franchise needs a much higher investment level at the outset, as premises will be required, normally in good locations, so there’s plenty of footfall to generate sales. Many of these franchises will expect their franchisees to run multiple outlets and sometimes a development agreement will be signed, committing the franchisee to opening an agreed number of outlets within a set period of time.

4. Investment franchise

This type of franchise needs a significant amount of financial investment and the franchisee will not normally expect to be working in the business on a day to day basis.

An example of this type of operation could be large hotel chains, where the franchisee is a corporate investor who already has an executive team in place to take on the business operations.

Although buying a franchise should reduce the risk of going it alone, it stills involves lots of hard work and commitment on your part to ensure success. Therefore, you need to make sure the business is one you will enjoy and can see yourself doing day to day, so always do your research at the outset.

The author

Cathryn Hayes is franchise director at Revive! Auto Innovations

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