• Franchised businesses account for about 50% of all retail sales in the United States.
• 1 out of every 12 business is a franchised business.
• A new franchised business is opened every 8 minutes of every business day.
• Franchise businesses employ more than 14 million Americans.
• There are over 2,000 franchise companies operating in the U.S. doing business through more than 316,000 retail outlets.
• More than 75 industries use franchising to distribute goods and services to consumers.
• A study by The United States Chamber of Commerce found that 86% of franchises opened within the last five years were still under the same ownership and 97% of them were still open for business.
• A U.S. department of commerce study showed that less than 5% of franchise businesses were closed each year. Compare that to a U.S. Small Business Administration study which found that 62% of non-franchised businesses closed within the first 6 years of their existence due to failure, bankruptcy, etc.
• Total sales by franchised businesses are projected to reach over $1.7 trillion, this year.
• The median gross annual income, before taxes, of franchisees is in the $75,000 to $124,000 range, with over 30% of franchisees earning over $150,000 per year.
• Franchises have a 90%+ success rate. Most people can’t even predict that they can keep their jobs with a 90% certainty.

Unfortunately, the market place is not very tolerant of the inexperienced neophyte trying to learn how to operate a new business. If you can't compete in the market place, you get eaten by the sharks very quickly. You go bust, you lose: your money, your credit, your home, your reputation, and sometimes even your family. Failing in business can be a horrible experience. Unfortunately, this happens to thousands of poor souls every year in the U.S., and it is so unnecessary.

Unless you have considerable experience in the specific type business that you are considering going into, it is very probable that you will fail. Business format franchising is as close as you are going to come in today's market place to a guarantee of success. All the studies done have found that franchised new business startups rarely fail,and when they do, it is typically because the franchisee did not stick to the franchiser's systems.

In all human endeavor, there is involved a learning process. This learning process requires going through a series of trial and error encounters wherein knowledge is gained by trying and failing, trying and failing again and again, and eventually trying and succeeding. This process is generally called the learning curve. In the context of franchising, the franchiser has already gone through the learning curve and has learned the secrets of success for the specific business. In business format franchising all that has been learned by going through the curve is transferred to the franchisee. This is fundamentally why you buy a franchise, to minimize risk and give yourself the best possible chance to succeed. Another reason why it is prudent to buy a franchise is that a franchise investment can be thoroughly researched before any significant expenditures are made.

With a new business startup (non-franchise) you are always operating in the dark. No matter how much research you do, it is very difficult to get a handle on so many aspects of the new business. With a franchise, the franchiser is a wealth of information about the business from how to prepare a pro forma to the best personality traits for the business. But the most important information comes from the existing franchisees. With a good systematic approach you can get answers to nearly all of the really key questions. Such as: Do you feel that you were properly trained? How long did it take before you reached break even? What is your annual return on investment? How do you feel about the day-to-day duties of the business? If you had it to do over, would you do it again? You can in a very real sense "try the business on" before you buy, to make sure it is a good fit for you.

Another very important reason to buy a franchise is intertwined into its basic nature. Franchising inherently leads to rapid growth because the franchisees provide the expansion capital. There are few restraints to growth in franchising. As a franchise system expands into hundreds of units many positive things begin to happen. The name begins to become well known because people see it everywhere. Most people associate size with success and it is true to some extent. The large number of units enables the franchise to advertise heavily, which tends to increase sales. A synergy begins to be created in which success begets success. The franchise begins to squeeze out competition through it's sheer size. The franchise can also buy products in large quantities and at a significant discount over a non-franchised business structure.

The above concepts are just a few of the benefits of a franchised business over a non-franchised business. With this being said, the obvious main benefit of a franchised business would be the reduced risk of failure for your new business venture.

Over time the regulations governing franchises became a part of European Common Law. Over the centuries, the franchising concept has evolved as the economies of the nations of the world have evolved. In the 1840's in Germany certain major ale brewers granted franchises to certain taverns, giving those taverns the exclusive right to sell their ale. This was the beginning of the concept of franchising as we know it today. In 1851, the Singer Sewing Machine Company began granting distribution franchises for their sewing machines. Singer had written franchise contracts which were the forerunners of modern franchise agreements. In the 1880's cities began to grant monopoly franchises to street car companies and utilities for water, sewerage, gas and later,electricity.

Around the turn of the century, the oil refinery companies and the automobile manufacturers began to grant the right to sell their products. At this stage in the evolution of franchising, it was essentially just the granting of the right to distribute and sell a manufacturers' products. Business format franchising, which is the dominant mode of franchising today, came onto the economic scene after World War II with the return of the millions of US servicemen and women and the subsequent baby boom. The baby boom is still driving the economy and will continue to do so into the next century. There was an overwhelming need for all types of products and services, and franchising was the ideal business model for the rapid expansion of the hotel/motel and fast-food industries.

During the explosion of the 60's and 70's there were many abuses in franchising. There will always be the unscrupulous con men/women among us ready to prey on the uninformed and gullible. There were a number of totally fraudulent franchise companies which literally took peoples money and ran, and there were a number of companies that were undercapitalized and poorly managed which went bankrupt leaving a trail of failed franchisees who lost everything. It became clear that the franchise industry had to change in order to remain a viable business concept. On the industry side, The International Franchise Association was created with the specific intent of uplifting the entire industry. The IFA holds training in all aspects of franchising which greatly enhances the professionalism of the industry. Members of the IFA are required to adhere to the IFA's Code of Ethics which sets a high standard.

The IFA works closely with the US Congress and the Federal Trade Commission on improving how the industry relates to the franchisees. On the government regulatory side, the Federal Trade Commission, in 1978, required that all franchisers submit to all potential franchisees a document called the Uniform Franchise Offering Circular or UFOC, before receiving money. The UFOC provides very detailed information on the franchise company, such as its history, information about the officers, litigation history, audited financial statements, the franchise agreement, which is the contract between the franchiser and franchisee and a current list of franchises with owners names and telephone numbers. The intent of the UFOC is that it provides enough information so that the prospective franchisee can make an informed decision.

The FTC doesn't actually review the UFOCs unless there is a complaint and it decides to conduct an investigation. Also, there are a number of states called registration states which have their own requirements that must be met before a franchiser is allowed to sell franchises in their states. In some cases these requirements are more stringent than the FTC's. There are several franchisee associations which work to protect the interests of franchisees. Today, franchising is a highly regulated industry which offers a great opportunity to those individuals who truly want to realize their dream and go into business for themselves.

Finley Business Solutions is an Independent Contractor engaged in the activity of introducing prospective business buyers to sellers of franchises.

Finley Business Solutions is paid a finder's fee or commission by the seller if you elect to purchase a business from a company that was introduced to you by us.

Finley Business Solutions has not checked the accuracy of the written or web site information provided by the seller, and assumes no responsibility for the acts, errors, or omissions of the seller, or the outcome of any transaction.

Finley Business Solutions is not qualified to advise in any part of the purchase of a franchise. You are urged to seek professional advice from a lawyer, accountant, or other qualified resource.

Many Franchisors disclose various earning's claims in their disclosure documents. Finley Business Solutions does not enter into discussions of earnings claims. Any earning claims information shall come directly from the franchise representatives.

Buying a franchise is a complicated investment. Take your time to decide and personally visit the headquarters of the company you elect to buy from. Make good, common sense decisions in all investment matters.

The Federal Trade Commission regulates the sale of franchises. The FTC has a very user friendly web site, http://www.ftc.gov/. We suggest you use it.

Your state may also have laws regarding franchises. Ask your state consumer affairs agencies about them.

The Better Business Bureau is another excellent information source for potential franchise buyers. http://www.bbb.com/ will put you in instant touch with both local and national offices.

You alone are responsible for researching the franchise you purchase.