If I say the word ‘franchise’ to you, what do you think of?

The chances are you probably thought of a well-known franchise company that you know of. It might have been a fast-food franchise such as McDonald’s®, Burger King® or KFC®, but either way it was probably a big well known brand.

What many people fail to realise is that the franchise concept has moved into may different types of industry, and its popularity is on the rise as more and more people start to take their financial futures into their own hands amid all the economic turmoil that surrounds us right now.

The concept of a franchise goes back many, many years. The idea that you could give someone else the right to use your brand or business model is not exactly new. Many businesses have used this method of growing their business by allowing others to license the business model.

Pretty much all successful businesses that have employed a system, market their business well and have a strong brand are good candidates for franchising. In fact, even if you never intend to franchise your own business, instead opting to grow through wholly owned expansion, systemising your business to the level that would enable it to be franchised is a good practice.

For the franchisee, there is the opportunity to buy into a ‘ready made’ business that already has a proven business model that is working elsewhere. More often than not, branding and marketing, the biggest obstacles standing in the way of growth for many independent businesses, is handled and controlled by the franchisor. For the inexperienced entrepreneur, this can be a good thing as either all of the marketing is handled by the franchisor, or strict guidelines on how to market and where are provided to the franchisee, thereby removing all the guesswork.

This brings us to the heart of what makes a franchise attractive to many a budding business owners:

The guesswork involved in starting an independent business, is a risk too far for many inexperienced business people. The risk equates to potential costly mistakes, which makes a business model where everything is laid out is attractive.

However, for many people, the costs involved in buying a franchise is prohibitive. Many people simply don’t have enough capital to make an investment of $100,000 to $2.5m for a return that may happen in three to five years and which is at the mercy of a fierce economic environment.

If you fit into this category, where you have capital to invest in a business, but not to the levels that many franchises demand, then you may want to consider an online home based business as a franchise alternative. The advantages of a franchise such as a marketing plan, following a proven and established business model, together with the necessary systems to grow your business, are still there, but at a fraction of the cost. Leveraging the power of the Internet as a business platform can allow for a return on investment  that far exceeds that from a traditional franchise.