Topic > Franchising vs. Business Opportunities - 1881

To the untrained eye, franchise investing and business opportunities look more or less the same thing. Both invite you to purchase a package of goods and services and business concepts. Both offer you the chance to capitalize on a business idea that has already proven successful. Both provide training, support and access to a valuable market. In reality, however, there are huge differences between the two concepts. While these key distinctions sometimes appear subtle, identifying and understanding them can help protect you as you dive into your new business. If there's a significant difference between a franchise and a business opportunity, it's the role of a brand. Licensing trademark rights is a hallmark of franchising: every franchisee of a McDonald's, Subway or Holiday Inn operates under a trademark license. The consistent image represented by these and other franchise systems symbolizes their strength in the market and is the direct result of a trademark license. If a program grants you the right to operate under a vendor-owned brand, you are most likely looking for a franchise rather than a business opportunity. Never underestimate the value of that brand. Well-known franchise brands such as Burger King or Pizza Hut are powerful magnets for consumers. This magnetism is created and maintained by years of national advertising: we grew up with these brands. The power of a franchise brand is that it promises consistency to consumers. When someone pulls up to see a brand on a sign, they know exactly what to expect. As a result, weaker brands, such as those from a new franchise system or those new to your area, don't have as much market traction and won't be as valuable to the franchisee. Franchises also place an emphasis on training and ongoing assistance in the operation of the business. The appeal of franchising – being in business for yourself but not by yourself – is rooted in the know-how and services provided by the franchisor over the course of a long, supportive business relationship. On the other hand, most business opportunity vendors offer stand-alone programs with some (often recorded) instruction and little to no ongoing business support. Another distinction between franchising and business opportunities is cost. A retail franchise program can carry initial fees of $30,000 or more with a total business investment of $50,000 and more. In contrast, the purchase prices of most business opportunities are low enough to put on a credit card, ranging from a few hundred to a few thousand dollars..