Recommended for you

Traditional vs Business Format Franchising: What's the Difference?

Traditional vs Business Format Franchising

Feb 18, 2023

Traditional franchising involves the franchisor granting the franchisee the right to sell its products or services under the franchisor's trademark and trade name.

Franchising is a popular business model that allows entrepreneurs to start a business using a proven system, brand, and support from a franchisor. A best franchise marketing agency can help you to grow your business. There are two main types of franchising models: traditional franchising and business format franchising. Understanding the differences between these two models can help you determine which type of franchising is best for your goals and ambitions.

Traditional Franchising

Traditional franchising involves the franchisor granting the franchisee the right to sell its products or services under the franchisor's trademark and trade name. The franchisee operates the business using the franchisor's established business system and training program. The franchisee pays the franchisor a one-time franchise fee and ongoing royalties based on a percentage of sales.

Advantages of Traditional Franchising Include

Proven Business System: The franchisor has a proven business system in place, reducing the risk of failure for the franchisee.
Brand Recognition: The franchisee benefits from the franchisor's established brand recognition, which can help attract customers.
Training and Support: The franchisor provides training and support to help the franchisee successfully operate the business.

Disadvantages of Traditional Franchising Include

Limited Creativity: The franchisee must follow the franchisor's established business system, leaving limited room for creativity and innovation.
Royalties: The franchisee must pay ongoing royalties to the franchisor, which can be a significant expense.
Restrictions: The franchisee must adhere to strict restrictions set by the franchisor, including product offerings, operating procedures, and marketing strategies.

Business Format Franchising

Business format franchising involves the franchisor granting the franchisee the right to operate the business using the franchisor's established business format, including its trademark, trade name, products, services, and franchise marketing strategies. The franchisee pays the franchisor a one-time franchise fee and ongoing royalties based on a percentage of sales.

Advantages of Business Format Franchising Include

Proven Business System: The franchisor has a proven business system in place, reducing the risk of failure for the franchisee.
Brand Recognition: The franchisee benefits from the franchisor's established brand recognition, which can help attract customers.
Training and Support: The franchisor provides training and support to help the franchisee successfully operate the business.
Flexibility: The franchisee has more flexibility to innovate and make changes to the business format to meet local market conditions.

Disadvantages of Business Format Franchising Include

Royalties: The franchisee must pay ongoing royalties to the franchisor, which can be a significant expense.
Restrictions: The franchisee must still adhere to some restrictions set by the franchisor, including product offerings and marketing strategies.

In conclusion, both traditional and business format franchising offer benefits and drawbacks. The type of franchising that's best for you will depend on your goals, ambitions, and business preferences. Whether you choose traditional or business format franchising, it's important to do your research and thoroughly understand the terms and conditions of the franchise agreement before making a decision.

Report this Content

This article has not been reviewed by Odyssey HQ and solely reflects the ideas and opinions of the creator.

Student Life

The 5 Painfully True Stages Of Camping Out At The Library

For those long nights that turn into mornings when the struggle is real.

Southwestern University

575

woman reading a book while sitting on black leather 3-seat couch

Photo by Seven Shooter on Unsplash

And so it begins.

1. Walk in motivated and ready to rock

Camping out at the library is not for the faint of heart. You need to go in as a warrior. You usually have brought supplies (laptop, chargers, and textbooks) and sustenance (water, snacks, and blanket/sweatpants) since the battle will be for an undetermined length of time. Perhaps it is one assignment or perhaps it's four. You are motivated and prepared; you don’t doubt the assignment(s) will take time, but you know it couldn’t be that long.

Keep Reading...Show less

library

Student Life

The 14 Stages Of The Last Week Of Class

You need sleep, but also have 13 things due in the span of 4 days.

Michigan State University

488

Photo by Estée Janssens on Unsplash

December... it's full of finals, due dates, Mariah Carey, and the holidays. It's the worst time of the year, but the best because after finals, you get to not think about classes for a month and catch up on all the sleep you lost throughout the semester. But what's worse than finals week is the last week of classes, when all the due dates you've put off can no longer be put off anymore.

Keep Reading...Show less

Student Life

28 Daily Thoughts of College Students

"I want to thank Google, Wikipedia, and whoever else invented copy and paste. Thank you."

Kennesaw State University

1178

group of people sitting on bench near trees duting daytime

Photo by Naassom Azevedo on Unsplash

I know every college student has daily thoughts throughout their day. Whether you're walking on campus or attending class, we always have thoughts running a mile a minute through our heads. We may be wondering why we even showed up to class because we'd rather be sleeping, or when the professor announces that we have a test and you have an immediate panic attack.

Keep Reading...Show less

daily life

Lifestyle

The Great Christmas Movie Debate

"A Christmas Story" is the star on top of the tree.

Seton Hall University

2438

Mental Floss

One staple of the Christmas season is sitting around the television watching a Christmas movie with family and friends. But of the seemingly hundreds of movies, which one is the star on the tree? Some share stories of Santa to children ("Santa Claus Is Coming to Town"), others want to spread the Christmas joy to adults ("It's a Wonderful Life"), and a select few are made to get laughs ("Elf"). All good movies, but merely ornaments on the Christmas tree of the best movies. What tops the tree is a movie that bridges the gap between these three movies, and makes it a great watch for anyone who chooses to watch it. Enter the timeless Christmas classic, "A Christmas Story." Created in 1983, this movie holds the tradition of capturing both young and old eyes for 24 straight hours on its Christmas Day marathon. It gets the most coverage out of all holiday movies, but the sheer amount of times it's on television does not make it the greatest. Why is it,
then? A Christmas Story does not try to tell the tale of a Christmas miracle or use Christmas magic to move the story. What it does do though is tell the real story of Christmas. It is relatable and brings out the unmatched excitement of children on Christmas in everyone who watches. Every one becomes a child again when they watch "A Christmas Story."

Keep Reading...Show less

christmas movie

Student Life

15 Thoughts Going Through Your Head Before Finals

Who isn't stressing out over finals right now?

Philadelphia University

1279

student thinking about finals in library

StableDiffusion

As this semester wraps up, students can’t help but be stressed about finals. After all, our GPAs depends on these grades! What student isn’t worrying about their finals right now? It’s “goodbye social life, hello library” time from now until the end of finals week.

1. Finals are weeks away, I’m sure I’ll be ready for them when they come.

Keep Reading...Show less

finals

Recommended for you

Traditional vs Business Format Franchising: What's the Difference?

Traditional vs Business Format Franchising

Traditional Franchising

Advantages of Traditional Franchising Include

Disadvantages of Traditional Franchising Include

Business Format Franchising

Advantages of Business Format Franchising Include

Disadvantages of Business Format Franchising Include

Subscribe to our Newsletter

For those long nights that turn into mornings when the struggle is real.

1. Walk in motivated and ready to rock

2. Disappointed you let it get this bad

3. Distracted: When a 10-Minute Break Becomes an Hour

4. When the Yearning for Sleep Sneaks Up

5. In the words of Lorelai Gilmore "Coffee, Coffee, Coffee"

Oh, so done.

You need sleep, but also have 13 things due in the span of 4 days.

1. When it's December 1 and you have seven things due, three exams, and haven't slept in three days.

2. So you stress.

3. And cry.

4. Then call your mom to cry some more.

5. After the pep talk, you feel determined to get everything done.

6. But, now you're tired.

7. And really hungry.

8. Suddenly, it's 2 a.m. and you have only written three sentences and your paper is due in the morning.

9. You've made it to Friday... somehow.

10. Then Sunday hits and you find yourself back at the Lib.

11. So you cry some more.

12. But, you fight through the tears to get everything done because you're determined.

13. In the end, you feel on top of the world because you made it through the last week of class alive.

14. But, now it's finals week so good luck.

"I want to thank Google, Wikipedia, and whoever else invented copy and paste. Thank you."

1. I'm so tired. I need a nap. Maybe I can sleep with my eyes open in class? Or pretend I'm not napping?

2. We have a test today? Why didn't anyone tell me? Did I know this?!

3. Can I quit school yet? It's only October, and I need a vacation.

4. The struggle is so real.

5. I'm so broke. SOS.

6. Stressed? Eat everything you own in your pantry and stuff your face with all your feelings.

7. "Did we have anything due in class today? Homework? Quiz? Test?" "Not that I know of..."

8. I need food. Where is the closest place to get food? I need it stat.

9. This is the longest day of my life. I need a drink, or two, or three.

10. Sleep? What is sleep? What a foreign concept.

11. When someone suggests going and studying in the library, let alone studying in general.

12. When the cafeteria or student center is packed and you can't find a seat anywhere so you literally have to sit in an abandoned corner.

13. When you see someone you used to hook up with. They see you, and approach you; so you have to pretend like everything is normal.

14. When you get your exam and realize you didn't study as much as you should have.

15. When you crush it on an exam or paper that you totally bullshitted.

16. I need a grande, extra strong coffee to get me through today.

17. When the professor announces you have a project due the following week with no instruction on what it's on and how to do it.

18. Is it Friday yet? Where's the weekend when you need it most?

19. It's freezing in here. I feel like I'm sitting in an igloo. I should have brought a jacket or worn long pants.

20. Did I remember my book? Damn, I forgot the book, and of course I need it for that quiz in class.

21. I would pay a million dollars to not go to class today; or actually never again.

22. I need a hoverboard to ride to class. Maybe then I wouldn't be running 15 minutes late to class every day.

23. Oh she/he's cute! I wonder if they're single. Who are they texting? They're BF/GF? I wonder if they think I'm cute. Could they be a potential new bae?

24. Why is there never any parking? I pay thousands of dollars a year for one parking spot to be open.

25. When it feels like you've been in class for an hour and you look at your phone and it has only been five minutes (I'm crying on the inside).

26. When the professor asks if there are any more questions at the end of class and someone raises their hand.

27. When you get assigned the most incompetent group of people possible for a group project.

28. I need a comfort dog so I can avoid all life and school responsibilities.

"A Christmas Story" is the star on top of the tree.

Who isn't stressing out over finals right now?

Trending Topics

Top Creators

Trending Stories

Best of News

Subscribe to Our Newsletter

Facebook Comments

Subscribe to our
Newsletter