Different Types of Franchises

Franchising is an exceptionally flexible business model and practically any kind of business can be successfully franchised. Most franchises can be categorized by different factors such as investment level, marketing efforts, operations, investment levels, etc.

All aspiring entrepreneurs who are looking to start their own business are increasingly choosing any one of the different kinds of franchise models that are available in the market. Now there are many types of franchising models available ranging across a wide range of industries.

In case you wish to open a franchise business agency, you must be clear about the kind of industry that you want to be involved in, the overall financial commitment to which you can commit easily, and the time that you are willing to invest.

In this blog, we will have a detailed look at the five different franchises that are mainly promoted and used in the market. Let’s begin.

1)Job-Franchise: Majorly, this is a home-based or a low investment franchise that is generally taken by a person who desires to start and run a small franchise business agency Usually, there is a need to purchase minimal equipment, stock, and sometimes a vehicle.

Some of the wide and diverse range of services that can be offered under the job franchise include opening a travel agency, a dry cleaning store, offering cell phone accessories, real estate services, shipping services, event planning, and management, etc.

A job franchise is mostly meant to operate with a few people, typically less than five. Most people who choose to run this kind of franchise, operate it with a few people only.

2)Product Based Franchise: A product-driven franchise agency is generally based on the supplier dealer relationship where the franchisee is liable to distribute the franchisor’s products. The franchisor licenses a trademark but mostly does not offer franchisees an entire system for running their business.

More often than not, product franchises deal with large products such as cars and car repair parts, computers, bicycles, appliances, technical gadgets, etc. Product distribution franchising is based on a significant amount of retail sales.

Many times, the franchisor licenses not just the distribution but also some parts of the manufacturing process like in the cases of soft drinks or food production. In essence, the franchisor is responsible for offering the product so that the distributor can finally sell the product ahead.

One of the most important things given by the franchisor is a product whereas the business format includes training and support as well. With this kind of franchise, the franchisee can be way more independent in terms of not having guidelines that a business format franchise has. That said, it must be remembered that a product distribution franchise follows some guidelines like selling products on an exclusive or semi-exclusive basis. The franchisee is liable to pay a fee for using the brand’s name and products that are supposed to be sold.

3)Business Format Franchise: This is the kind of franchise that people call a typical franchise. It functions when the franchisor gives the right to trade names, business processes, trademarks, and the system to sell a product for a fee. The franchisor is in fact very extensively involved in how the services are provided and the way in which a business is run.

A business format franchise relationship is based on guidelines and expectations from the franchisor which the franchisee is supposed to follow. An official agreement gets enforced between the two parties for a period of time and the best thing is that ongoing support, advice, and training are offered as well. This training makes a huge difference in the overall success of the business and hence it is a great benefit.

One of the best examples of a business format franchise is an insuranceagencyfranchise which is chosen by most franchisees. Other examples include prominent food brands as well. One can tell how closely the franchisor and franchisee work with each other from the way in which these big brands operate in terms of the similarity in products and services. For instance, if you buy an auto insurance policy from Superior Insurance in Virginia, you can get the same policy in North Carolina as well.

4)Management Franchise: This is a kind of franchise that is focused on the ability of a franchisee to manage the franchise. This franchise is perfect for people who have some kind of previous managing experience because it enables individuals with transferable skills to take ownership of a business and also lead it to success.

Some of the business-related skills such as possessing an entrepreneurial mindset and working with some experience can help in ensuring success. For this kind of franchise, you are required to pay the fee that helps in using the trademarks while focusing on business development and management of the business.

Management franchising is also a great option for resale franchises which are essentially bought from an existing franchisee while all the day-to-day tasks are going by in place including the existing staff management. It may seem like you do not need to make any changes and things are relatively easy to run, but there are some things that can always be deliberated. In case you think that the franchise is not running as per your expectations then you can implement some serious changes to the staff and their daily operations.

5)Conversion Franchise: The conversion franchise is more like a modification of a standard franchise relationship. So many franchise systems develop by converting conventional independent businesses in the same industry into franchise units.

This franchise adopts marketing, trademarks, training systems, and advertising programs along with some service standards. They also increase procurement savings. The franchisor that operates this model has a potential for pretty rapid growth in terms of units and royalty fee income. Some of the examples of industries that use conversion franchises include florists, professional service companies, air conditioning, etc.



Franchising is an excellent business model that can enable aspiring entrepreneurs to turn their dreams into a reality. Based on your personal interests, you can choose to run a franchise in the best possible way so that it becomes beneficial for you in the long run.