According to franchise-update.com, a management resource for franchisers, there are over 2,500 different types of franchises operating in the United States with 534,000 different individual set-ups conducting operations. By the numbers, this accounts for 3.2% of all American business, with a large 35% stake in retail revenue.

Franchising has a myriad of benefits. For starters, the single most important advantage of franchising is less risk when dropping down your investment. Franchises are known for springing to life quicker and profiting within a short period of time. The brand and operation systems contribute to these successes. Small businesses spruce up like scions across the entire country, but only a select few will prevail – with the most common downfall being weak management. Strong management is definitely a hallmark of the franchising game, because you invest in the managerial knowledge that comes with it.

The managerial knowledge is what can mold your business to profit-saving. To begin, the franchise company can buy products, goods, and supplies for you in mass and introduce you to suppliers that’ll charge you a lot less. When you begin your franchise business, higher-ups will be there to assist you on everything from interior design, day-to-day operations - all the way to teaching you company protocol that’ll help business. In addition to the knowledge, brand recognition is also a pivotal advantage. Customers will rest knowing they’re regular customers at a brand they’re already familiar with. Chili’s, Burger King, Taco John’s and other restaurant chains, when franchised, are a plus because people have already built a personal relationship with them. Unlike the unknown brand that might struggle at attracting clientele off the bat, known brands click more. You’re at a rest stop in Delaware and you see two similar restaurant chains, Bing Bing Buffalo Wings or Fridays. Where would you go? Most likely, it would be TGIF.

This business model also means automatic quality production on behalf of the franchiser and franchisee. Management is highly motivated, partially because their capital and invested monies in the franchise are at risk. This forces them to become well trained and follow training programs to the letter. In turn, this leads to better run franchise units that can even make more profit than a company owned unit. The franchising business model also allows for quick expansion. Launching stores all over the place will grab a hold of the marketplace and maximize profits. Profit margins are also helped by companies who pass on savings to each individual franchise who is part of a larger collective unit.

What does all of this lead to? Answer: market dominance and high profits while spending as little as possible. Because franchises can spruce up all over the place in a tight area, they can “flush out” their competition. Advertising costs are spread among each franchise. Hefty advertising budgets with the amount of locations are a surefire combination that can really strengthen the life of the franchises.

To conclude, the powerful business model known as franchise packs plenty of perks.

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• Business Services
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• Financial Services

Finding the right financing option can be a frustrating process without knowing your options. We have put together valuable information and resources, which will help you through the process. 

1. SBA Financing
The U.S. Small Business Administration (SBA) guarantees loans for private banks/lenders. Programs include the popular 7(a) loan for up to $100,000.

2. Non-SBA and Specialty Financing
There are commercial lenders that specialize in franchise financing through equipment leases and structured term loans. There is also the ERSOP program, using your 401k or IRA as start-up capital without penalties, taxes or distributions.

3. The Franchisor
Many franchise companies either offer financial assistance themselves or help franchisees find a bank or other lender. Most have a list of "preferred lenders".

Personal Assets
Whether it's SBA or non-SBA financing, anywhere from 15% to 30% of the total capital need can be required of the borrower. Franchise start-up costs vary wildly across franchises, so this could be anywhere from $20,000 to $200,000. A borrower may need to refinance their personal property or liquidate stocks, bonds, IRAs, 401k, etc.