What Is a Franchise?

A franchise is a right or license granted to an individual or group to market a company’s goods or services in a particular territory.

The individual who gets these rights is called a franchisee, and the company giving the right is called a franchisor.

How Does Franchising Work?

Franchising is a way for individuals to invest in an existing business model and franchising a competitive advantage operating their own business. The franchisor licenses a franchisee the right to use a company or to distribute goods or services for a specific time. The franchisee has to pay the franchisor a fee that includes an initial payment and regular ongoing costs.

Why Should You Pay Fees?

The franchisee is investing in a proven system with all the experience and knowledge of the franchisor. This feature is often a more accessible and quicker method of getting a substantial return on investment (ROI) than starting up a business from scratch.

If you have the money but lack the experience to run a business, franchise fees cover training costs. For example, if you’ve left a technical job that didn’t involve managerial experience, franchising can save you time and money.

What Are the Rules?

Of course, there are limitations to owning a franchise. You will have to operate the business according to the franchisor’s rules and processes. After all, the franchisor’s tried and tested formula is what has made the company a success.

What Does a Franchisor Provide?

Franchisors provide an existing business model, an established brand, operating systems and processes, marketing strategy, training, and ongoing support.

How Long Is a Franchise Term?

A franchisee who abides by the terms and conditions mentioned in the agreement enjoys the benefits of franchise business for the length of the franchise term, whether that’s three years, five years, or longer. At the end of the period, the franchisor can renew the franchise agreement, though that isn’t always guaranteed.

What Should You Consider Before Starting a Franchise?

When selecting a franchisor, look at the support systems they have put into ensuring their new location is successful. We’ve listed a few areas of research below for your reference. Keep reading to understand what to look for in a successful franchise model.

Ready to own your own business? Learn about Cinch Franchise now!

Available Territories

Most if not all franchisors are looking to grow in a particular geographical area. It would not be profitable, for example, to open a new location just miles from another or in a place where there’s no demand.


You should match your experience to an industry that will work for you. For example, if you’ve worked as a computer support technician or help desk supervisor for many years, I.T. franchises would be a perfect fit.

Initial Investment

The initial investment amount includes royalty fees, intellectual property, and inventory costs. Many franchisors also have a hands-on training program on how to scale your franchise for years to come.


If financing is available, you’ll be able to pay for your investment over time in installments. Companies like Benetrends offer flexible financing based on your credit history and business goals.


The franchise’s marketing should have defined brand guidelines on social media and press releases. You can get a good sense of this by following the franchisor on all prominent socials. You should also see if they have a YouTube channel where they explain how their business works.

Advantages of Franchising

  1. Franchisors offer the independence of small business ownership supported by the benefits of an extensive business network.
  2. You don’t need extensive business experience to run a franchise.
  3. Franchises have a higher rate of success than new start-ups.
  4. A franchisee may find it easier to secure financing for a franchise over a new business.
  5. Much of the work needed to launch a business idea is already complete.
  6. You can tap into the collective buying power of the franchisor. In cases, financing may be easier to secure.

How Do Franchisees Succeed?

Good communication with a franchisor and a great attitude to the business will make a difference. A franchisee’s success is dependent on many things – the brand, business support, location costs, and ultimately, the franchisee’s ability to manage and control the business.

Fastest-Growing Franchise Opportunities

Plenty of franchise opportunities in the U.S. over-promise and under-deliver. To determine if a franchise model is a good fit for you, you need to get a clear assessment of the company’s Franchise Disclosure Document as required by law. This document will typically outline start-up costs, types of expenditures, and benchmarks for success.

Predictable Recurring Revenue

Recurring revenue for a business means that the product or service is both profitable and environmentally friendly. Corporations that understand how to scale in a new territory secure an 18% higher return on investment (ROI) than companies do not. When you look for recurring revenue, prioritize brands with high reputations and an existing customer base.

About Cinch I.T.

Since 2004, Cinch I.T. has been providing customer-focused I.T. support for businesses of all sizes. As the country’s fastest-growing I.T. franchise, Cinch I.T. is known for its fast and friendly service. Also, Cinch’s franchising service consistently ranks as one of the top I.T. franchises in business publications. The company has won awards in the Worcester Business Journal, Inc. 5000, the Channel Co. CRN, and more. To learn more, visit cinchit.com, or for more information about franchise opportunities, visit cinchfranchise.com.

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