Franchises and Business Opportunities: What’s the Difference?

A reader asked today:

Hi Dane. Great new design! What’s the difference between a franchise and business opportunity?

Great question! While they do appear similar, they are very different.

In a nutshell, business opportunities simply get you started in the business, while franchises are ongoing, contractual relationships between the someone and a franchising company. Every franchise is a business opportunity, but not every bizop is a franchise.

Business Opportunities

When you purchase a business opportunity, you do so with the expectation that in whatever format (be it ebook, printed manual, dvd, online course, etc), will learn how to start and operate a business. After you learn how to start and run the business, you’re on your own to sink or swim, to fail or succeed, on your own. You are under no obligation to operate your business the way that the business opportunity manual described. You can make your own decisions, to either follow the procedures laid out for you, or not.


Franchises, on the other hand, start out the same. The franchise company will provide you with education and training that will teach you everything there is to know about the business and how to run it. Unlike a business opportunity, the franchise involves a binding agreement between the franchisee (the buyer of the franchise) and the franchisor (the seller). The franchisee must operate the franchise in the way that the franchisor has spelt out. The franchisee can also expect ongoing support, and material resources, in exchange for a regular financial payment from the buyer to the seller. Typically, franchises are also more expensive than business opportunities.


Examples of franchises you’re probably familiar with include the sandwich restaurant Subway, the convenience store 7 Eleven and the rental car company Hertz.

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