As we’ve covered in this column before, there are essentially three different ways you can become a business owner. You can start from scratch, buy an existing business from its current owner, or purchase a franchise - options I like to call “build, buy, or join.” Yet of these three pathways, only franchising offers multiple advantages designed to ensure your success. Interest in entrepreneurship and the franchising industry has never been stronger than at this point in time, a factor many attribute to the pandemic – a time of communal reflection in which people began to reassess what kind of future and career they truly wanted for themselves.

But admittedly, there is still a vast cross-section of people in the U.S. who lack a basic understanding of what franchising is and how it works. So, in this edition of The Serial Entrepreneur column, we’re getting back to the basics. Get ready for some Franchising 101.

How Does Franchising Work?

Using the simplest definition, franchising is a transactional agreement between an entrepreneurial candidate and a franchisor, or brand. The entrepreneur invests in the franchised business by paying an initial franchise fee and ongoing royalty payments. In exchange for the fee and royalty payments, the entrepreneurial candidate becomes an official franchisee in the franchisor’s network. Upon signing the franchise agreement (typically a 10-year commitment), the franchisee is provided with a proven business model to follow, an operations manual, comprehensive training, access to the franchisor’s systems and processes, as well as ongoing support. All combined, the franchisee has the legal right to use the franchisor’s brand name and all trademarks. Of the three ways to become your own boss, only franchising offers these advantageous benefits.

What Are Some Franchise Brands?

When asked what a franchise business is, most people think of fast food restaurants like McDonald’s, Burger King, or Wendy’s. It’s true that franchising is very prevalent in the restaurant and hospitality industry, but the truth is that there are thousands of franchise concepts (or brands) in the marketplace today, covering every industry and business sector you can imagine. There is everything from tree trimming and plumbing services to pet day care and hair salons. And everything from fitness centers and trampoline parks to vacation planners and business coaching. Franchise opportunities come in all price ranges – from as little as $5,000 to as much as $5 million and everything in between. Currently, the U.S. is closing in on achieving one million franchise establishments, which represents just over 10% of all small businesses. These franchise establishments employ some 8.5 million people and generate a combined $858.5 billion in economic output.

Who – And Who Isn’t - A Good Fit For Franchise Ownership?

Surprisingly enough, not everyone is cut out to own and operate a franchise. Because of the rigid business models, systems, processes, and operations built in to franchise opportunities, ideal owners must be willing to follow and strictly adhere to the franchisor’s proven business models. Personality-wise, they have to be coachable, passionate, goal-oriented, open to continuous learning, resilient, and willing to assume risk. What type of person isn’t cut out for franchising? For starters, people who admittedly “march to the beat of their own drum.” If you consider yourself a creative, free spirited, risk-averse person who likes to experiment, tinker, and bend the rules, you probably won’t be a good match for franchise ownership.

Hopefully, you now have a better understanding of what franchising is and how it works. I can share from experience that it’s an amazing industry with an enormous capacity to change people’s lives for the better. To pursue an entrepreneurial life where you’re in control of your own career destiny, you just have to be willing to bet on yourself and take a proverbial leap of faith.

Note: If you’re interested in learning more about franchise ownership, I’ll be speaking at the Hustle Entrepreneurship Conference at Creighton University’s Heider College of Business on Wednesday, Oct. 9 from 7:00 a.m. – 6:00 p.m. Tickets and pre-registration can be accessed by following this link: https://www.eventbrite.com/e/hustle-entrepreneurship-conference-tickets-.... Use the Promo Code: FRANNET for a 50% discount.

Blake Martin is the owner of FranNet of The Heartland, an Omaha-based franchise brokerage, sales, and consulting firm that provides no-cost coaching and consultation for entrepreneurs and small business owners. As a Certified Franchise Executive (CFE) and a graduate of the University of Michigan’s Psychology Program, he provides practical advice that helps entrepreneurial clients become small business owners, including franchise opportunities. He can be reached at bmartin@frannet.com.