8 Types Of Franchise You Need To Know If You Want To Buy It

Interested in buying a franchise business that is a trend lately? Of course, see the many types of franchise or franchise business that is growing rapidly tempting young businessmen like you.

However, did you know some kind of franchise in circulation today?
Franchising: Expansion and Distribution with Quality Assurance

In general, a franchise is an employment contract between the franchisor and the franchise.

Franchise business is usually done by exchanging money with an agreement to run a related business within a certain period of time.

Franchisors and franchisees share the same brand but are not related to each other. Why is that?

Franchisee sells products or services in accordance with the provisions of the franchisor, while the franchisor in charge of developing the franchise business.

Traditional franchises are generally used to extend their products by means of extensive distribution.

Companies like McDonald's or Marriott also use a franchise system to expand their brand by allowing others to distribute their products.

Franchising becomes one of the interesting business solutions and the good news has many alternative options in the franchising business.

Well, before you decide to buy a franchise, let's look at the following types of franchise below:

# 1 Product Distribution Franchise

The model of product distribution franchise is similar to supplier relationship with the dealer. However, the difference is that the franchise needs to understand some guidelines, such as agreeing to only sell products related exclusively to the franchisor's brand.

For example, an outlet may agree to sell a number of products with the exception of certain products.

This type of franchise also includes a form of integration of business activities. Franchisee parties are allowed to stand independently beyond their independence if running a business format franchise.

Some examples of franchises included in this type are Coca-Cola, Ford Motor Company, Exxon and Osim.

Product distribution franchises are typically used in large products such as motor vehicles, vending machines, computers and storage at grocery stores or supermarkets.

# 2 Business Format Franchise



In business format franchise, business integration is more thorough and complete. The franchise distributes the franchisor's products and services under the copyright of the franchisor as well as implements the format and procedures imposed by the franchisor in the business.

All terms and conditions of running a business are contained in a legally binding contract, with the following content:

Name of franchisor
Products and services
Procedure
Guidance and Standard Operation Procedure (SOP)
Marketing system
Supporting facilities


Business format franchising is the most popular and most common franchise type recommended in a franchise offering.

Some examples of companies that use Franchise Business Format franchises are McDonald's, KFC, Famous Amos, Starbucks Coffee and Dunkin 'Donuts.

# 3 Management Franchise

It is a franchise in which the agreement is made between the franchise and the franchisor, provided that the franchisee provides management expertise, formats and/or procedures for running the business.

Some popular examples of this type of franchise include Hilton, American Idol, and UPS Store.



# 4 Retail Franchise

Retail franchises tend to be popular for products or services that rely on customers 'walk-in'. Good location to be one of the key successes of this type of franchise, because the arrival of consumers is needed.

Retail franchises often apply business hours that are in line with other stores, so they are generally long and include weekends.
Many retail outlets require employees to operate stores and sell products and services.

Why is that? Because this type of franchise prioritizes interaction with consumers, where customer satisfaction is the main.



# 5 Investment Franchise

Investment franchise is usually synonymous with investing large sums of money into Business & Finance franchises without jumping into the field.

The franchisee will instead hire a team that includes managers to ensure the business runs smoothly without having to intervene.

# 6 Single Franchise Operator

Single franchise operators consist of 2 forms, both of which include sales of products or services that require certain marketing skills to ensure the public knows and knows the product or service.

One type of single franchise operator prioritizes openness to the public to provide a service. For example car parking (valet).

In this case, the franchisor operates and provides car parking services to all potential service users under a copyrighted brand.

The franchisor will generally provide all the equipment, uniforms and branding requirements that are fitted with the relevant franchise brand.

The second type of single franchise operators prioritizes directly in the business. Generally in standard work hours and work can be taken home.


# 7 Product Franchises

In product franchises, manufacturers have full control over the retail that distributes its products. In a contract agreed upon by both parties, the producer allows the store owner to use the trademark and copyright.

Shopkeepers are required to pay a sum of money to obtain the right or to purchase a number of products that qualify the franchise.

For example, a computer store where the owner sells Epson brand printers, usual producers will earn more than the seller.


# 8 Manufacturing Franchises

As an illustration, imagine if you want to open a Coca-Cola factory. To do so, you need to obtain the rights of the Coke Company to use its name and copyright.

You will then build a factory where the Coca-Cola Company will sell coke extracts that remain secret ingredients.

You have the right to mix all the ingredients and pack them into final products for later sale.