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Opportunities In Franchising*

Franchising is the most successful method
or way of distributing goods and services.

It has been around, in one form or another, since man first began to engage in commercial enterprise. Franchising has evolved from what in the middle ages was a simple grant of a right or privilege to the sophisticated business format franchise concept of today.

Minimizing Your Risk
Franchising is a business model that has the primary purpose of minimizing risk. Many studies done on the success rate of new (non-franchise) business start-ups show that over 90% fail within the first three years. The primary reason for this is that new owners must go through the learning curve of operating that specific type of business, and, unfortunately, the market is not very tolerant of inexperience. One of the main reasons that franchising is so successful is that the franchisor has already gone through the learning experience, tested the best possible methods for success, and takes what has been learned and makes it available to the franchisee. So, when buying a franchise, you are minimizing your risks and giving yourself the best possible chance for success. A recent Gallop Poll of franchisees found that over 94% considered themselves successful and that over 75% would buy their franchise again if they had it to do over.

Franchise Success Rate:**

Franchised businesses represent only 3% of all businesses, yet they account for fully 34% of all retail and service sales in the United States.
The success of franchising as a business strategy demonstrates the combined power of brand marketing, operating systems, consistency, and motivated people focused to service customer needs.
The success rate for independent small businesses, after 10 years of operation, is 2.3%, while for franchises, it's 92%.

Types Of Franchises
There are different types of franchising. One type that developed early on was the product franchise. In this format, a manufacturer will grant a franchisee the right to sell it’s products. Good examples of the product franchise concept are car dealerships and service stations. Developed in the U.S., the name and process franchise format allows the franchisee to use a special process, or recipe, and to use the franchisor’s name. Originally, companies such as Kentucky Fried Chicken^® and One Hour Martinizing were structured as name and process franchises.

Center Business format franchising, the primary franchising format of today, and the format used by Form YOU 3 International, Inc.^®, not only grants the right to use the franchisor’s trademarks and trade names, but also to sell it’s products and services. It involves the methods of doing business that have been developed by the franchisor. The franchisor makes available to the franchisee its operating systems, technical expertise, marketing strategies, training programs, management methods, and as much other relevant information as possible. The franchisor will additionally provide the franchisee with initial and ongoing training and support throughout the life of the franchise agreement. FranInfo’s “Welcome to the World of Franchising” says business format franchising is the most successful method of distributing goods and services in recent economic history. Today, franchising is a highly regulated industry which offers opportunity to those individuals who truly want to realize their dream of owning and operating their own business with as little risk as possible.

Low-Cost Start Up
Franchises that have start-up cost of $50,000 or less, (such as Form You 3^TM) are the fastest-growing segment in franchising.***

* Source: Information obtained from FranInfo “Welcome to the World of Franchising” October 21, 1997
** Source: U.S. Small Business Administration: “Report To The President” “Franchising in the Economy” 1988-1990. *** Based on Franchise Times, October 1997

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Important Notice: This information is not intended as an offer to sell, or the solicitation of an offer to buy, a franchise. It is for information purposes only.