An Introduction to the Retail Franchise

Retail franchise businesses offer entrepreneurs the opportunity to own a business serving consumers and operating within a proven business model. The support provided by the central franchisor makes a franchise a good choice for many who want to own a business that deals directly with the public.

Features

A retail franchise is any franchise business that serves the general public. Stores, repair shops, restaurants, hotels and beauty shops are all examples of retail industries in which franchises operate. While the franchise structure restricts what an owner can do, it provides more marketing, operational support and brand recognition than owners of stand-alone small businesses have.

Types

Some retail franchises, called product distribution franchises, sell standardized products but have varying business practices and formats. An example of product distribution is the standard auto dealership. More common is the business-format retail franchise, where each franchise unit follows a comprehensive and standard set of procedures and practices. The aim is a uniform consumer experience and improved operational efficiency.

Significance

According to the International Franchise Association, franchises account for roughly 1-in-12 retail businesses in the U.S. and 40 percent of all annual retail sales in the county. Price Waterhouse Coopers found that in 2009, franchise restaurants alone provided 4,377,000 jobs nationwide.

References

• vLex: Characteristics of Retail or Service Establishments
• U.S. Small Business Administation: Evaluating Franchise Opportunities (pdf)
• IFA: Frequently Asked Questions About Franchising
• "Entrepreneur": The Big Bang
• Price, Waterhouse, Coopers: 2010 Franchise Business Economic Outlook (pdf)

Resources

• New York BBB: Buying a Franchise
• "Entrepreneur": By the Numbers