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Business format franchising This is defined as a distribution network operating under a shared trademark or trade name with franchisees paying the franchisor for the right to do business under that name for a specified period of time.

As a business format franchisee, you operate under the franchisor's principal trademark?which is typically the name, or ?brand,? you use to identify your business. Subway, Motel 6, RE/MAX, UPS Store ? these are all examples of business format franchises.

There are three different types of franchises which you can choose from, they vary in terms of your position, your input into the business and the amount of involvement of the franchisor. The three types of franchises are; the business format franchise, product distribution franchise and management franchise.

Business format franchises involve the sale of a franchisor's products and services under the franchisor's trademarks and following the franchisor's systems. Product distribution franchises involve the sale of a franchisor's products under more traditional supplier-dealer relationships.

The franchise agreement outlines the costs of franchising ownership. All franchises charge fees. These include the initial franchise fee, as well as ongoing fees such as the monthly royalty fee, advertising or marketing fee, and any other fee. Agreements can include late fees and interest.

The business format franchise approach tends to be the most popular. It is commonly used by those who are wanting to be entrepreneurs. The franchisor will provide a clearly outlined formula for the franchisee to follow, including concepts relating to products, advertising, employee training, and more.