Step 1: What is Franchising?

When hearing the term “franchising,” folks might immediately think of McDonald’s or the major sports leagues. Franchising is the broad concept of licensing or selling a brand name to multiple business operators who then retain some profits from those operators, in exchange for the use of the brand. Through this blog series, Franchising U, Authority Brands experts want to shed some light on franchising and welcome potential franchise owners and those seeking an understanding of the franchising process.

Modern franchising has allowed businesses to grow and expand their brands for centuries. Singer Manufacturing Company is widely considered to be the first business involved in developing modern franchising. Isaac M. Singer faced two main problems when he was introducing his sewing machine: 1) Who would train consumers to use this product and 2) The capital he needed to fund the manufacturing of this product. Singer thought of the idea to sell the rights to sell the sewing machines to local business people across the country and train those who bought them. From there, Singer’s company was able to expand and grow in the marketplace and give business owners a chance to succeed in their careers. This is the same chance that Authority Brands is offering people all over the country.

Authority Brands strives to bring excellent home services that customers can trust, and support for our growing franchise network. The home services industry is rapidly expanding, and Authority Brands’ business model provides franchise owners with the tools they need to reach success. The franchisor is the owner of a product or service, typically a brand, which they then can sell to groups or individuals who can then sell the product or service. When a person buys a franchise and becomes a franchise owner, the franchisor will then supply tools and techniques to create a profitable business. Authority Brands offers franchise owners technology, tools, hiring, retention, marketing techniques, and more to ensure the development of the franchise. Business decisions that the franchisor makes, including the fee structure and how a franchise owner pays royalties, affect each franchise owner in the system. In franchising, there are three key things the franchisor provides and three key payments each franchise owner makes in return.

The Three Types of Fees Paid to a Franchisor

  1. A franchise fee for the use of the brand’s trademark and access to the operating system,
  2. Ongoing fees to support technology, marketing, and other paid services provided to the franchise network, and
  3. A royalty, or percentage of each franchise owners’ individual business unit's sales, to support the organization’s operations and continuous improvement

Franchisor Support

In exchange, a franchisor provides key support to its entire network of franchise owners. But each franchisor operates their systems differently, with different priorities.

  1. Marketing support
  2. Operational support
  3. IT support

The journey to becoming a franchise owner can be long and winding or quick and direct. We often see a typical time frame of five to six months from someone researching franchising to buying their first franchise. This blog series, Franchising U, is designed to walk you through each of the steps of the process so you can read, research, and process at your own pace.

Step 1: What Is Franchising?

Step 2: Researching Franchises To Own

Step 3: What Will Be Required Of Me If I Buy A Franchise?

Step 4: Introductory Calls & Meetings With Potential Franchise Brands

Step 5: What Is A Franchise Disclosure Document (FDD)?

Step 6: What Is Being A Franchise Owner Like?

Step 7: Meeting The Franchisor Team

Step 8: Decision Time

Step 9: Signing Day

Step 10: What It’s Like Running A Franchise Business?

Through this series, we hope to answer some critical questions you might have along the way, but our team at Authority Brands is always here to help answer any questions you might have!