Question: In a recent column you discussed how buying an existing business is one alternative to starting up from scratch. Can you tell me about the other common alternative – investing in a franchise?
Answer: In general, franchise businesses have a much higher success rate than general business startups. But there are tradeoffs, too. Let’s talk about this.
Basically, a franchise is a contractual agreement and relationship between an owner of intellectual property (like patents, trademarks, logos, or service marks), and another party seeking to use that identification in a business. A great many businesses which you see every day are franchises. Common examples include many auto dealerships, real estate companies, fast food outlets, and income tax preparation services. The franchise concept dates back to the late 1800s. Read more.