A franchise is a venture where a sponsor identifies someone with an idea or a proposal and decides to fund his project and give it the financial boost it needs to start off. This takes the headache away from the sponsor as he is working with a venture that has already been thought of, such that his main role is fund provision and following up on the progress being made. The person sponsoring the franchise is called the franchisor and the one being sponsored is called the franchisee. The franchisor and franchisee could even be separate entities.
As a rule of thumb, apart from financial support, a franchisee receives more support from the parent company; he gets to use the trademark name, and is more stringently controlled the franchisor. Business opportunity ventures, on the other hand, don’t receive as much support from the parent company, generally aren’t offered the use of a trademarked name, and are independent of the parent company’s operational guidelines.
As we’ve previously noted, there are numerous forms of business opportunity ventures. Some are even turnkey operations similar to a lot of package-format franchises. These business opportunities provide everything one could possibly need to start a business. They help the entrepreneur select a location, they provide training, they offer support for the licensee’s marketing efforts, and they supply a complete start-up inventory.
Unlike a package-format franchise, however, these types of business opportunity ventures aren’t trademarked outlets for the parent company. The company’s name, logo and how it’s legally operated are left solely to the licensee. Many times the only binding requirement between the seller and the buyer is that inventory be purchased solely through the parent company. Of course, all these stipulations are outlined in the disclosure statement and contract.
Buying a Franchise
A potential investor could simply buy off a company that he sees has potential for growth instead of opening a new one to rival it. This takes away from him the headache of establishing a new business opportunity all together. He only needs to have a good bargaining power to establish himself as a potential buyer. He may have the funds to see the business through but lacking in ideas. In this case the idea of acquiring the franchise makes up for the lack of innovation that may be crippling him