Most people think of fast-food restaurants when they think of franchises. The reality is that most Americans use the services or products of a franchise many times a day – from pumping gas to ordering food to getting their plumbing fixed or painting their house. In fact, one out of every three dollars Americans spend is spent with a franchised business. More than 120 industries operate within the franchising format.
There are two basic kinds of franchises. Product distribution franchises sell the franchisor’s product under its trademark and logo, but don’t use an established operating system. Examples include auto dealerships and gas stations.
The most common type of franchise is the business format franchise, which also uses the franchisor’s name, trademark and product but comes with a complete plan to run the business – an owner’s manual, if you will. Business format franchises include everything from fast-food and sit-down restaurants, to hotels, convenience stores, hair salons, automotive maintenance and repair, retail stores, dating services and real estate agencies.