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Focus on the popular franchise business model

An in-depth and informative online overview of the franchise business model notes that it is a comparatively recent form of commercial enterprise in the United States. Reportedly, the American franchising form “dates from the early 1950s and is a relatively new method of doing business.”

Obviously, its success cannot be questioned. There are many hundreds of thousands of franchised businesses operating – and, importantly, prospering – across the country. Collectively, the cash they annually bring in via their offerings of services and goods is approximately $760 billion. Millions of people work at franchised companies.

Franchises truly dot the landscape of every American city. And it is flatly unsurprising to see, say, a Subway or H&R Block office even in urban enclaves and towns that are among the tiniest in the country.

The sheer breadth of the franchise form is stunningly impressive, a point we stress on our website at the established business law firm of Gottschlich & Portune in Dayton. We note therein that entrepreneurs in Ohio and elsewhere operate “in every kind of franchise.” The franchise model is muscular and ever-growing in business sectors including health/fitness, beauty and grooming, pet products, financial services, sports, cleaning and more.

What is the lure? Why are so many would-be franchisees attracted to the business model?

Close linkage with a known franchisor is one obvious selling point. If you hoist up that golden-arches icon at a newly franchised McDonald’s, the locals will take notice. In return for a fee and royalty payments, franchisors supply franchisees with training, a known blueprint for success in the form of guidebooks and manuals, site-selection help, advertising assistance and more.

Not every franchisee succeeds, of course. But legions obviously do, which explains the continued pull of the business model.

Questions and concerns can easily arise relevant to formation, contracts, financing, real-estate acquisition, buy/sell decisions and more, for both franchisors and franchisees. They can readily turn to a proven law firm with franchise know-how for guidance and, when necessary, strong legal advocacy.

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