Why Are Franchises Popular?

Franchises are popular. Research was conducted by the International Federation Association and the National Franchise Association recently. In 2005, there were about 850.000 franchises operating in the U.S. alone in which around 10 million people are employed. Sales volume accounts for about 40% of all retail sales with around $1.5 billion. At this point, I do not really know if there is any business left that has not been using the franchise model already. You can find restaurant franchises, cleaning services and even dental practices. Most popular franchise categories still seem to be the restaurant, deli and sandwich franchises. Franchises all have a couple of things in common that makes them attractive to potential business owners: 1. Fast start up utilizing a working marketing system; 2. Peace of mind because it has been proven to work already; 3. Exclusive territory (in most cases). There are known disadvantages as well. For example, a lot of franchise companies do not give the ...  more