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Franchises

Franchises are everywhere; decorating the highways, squeezing into malls and airports, even sneaking into schools and office buildings. It's impossible to avoid a franchise these days.

Americans could survive on franchises. Hungry? A world of fast food and full-service restaurants await your patronage. Going on vacation? Check into one of a hundred hotels. Same for coffee, child care, cleaning your office, filling your car with gas, buying a home and exercising. There are even franchises for filing taxes!

Ticks!


Welcome to the United States of Franchise, where only eight percent of businesses are franchises, yet make up an oversized 40 percent of all retail sales. Why do franchises work? Well, Americans like reliability. Franchises provide exactly that - a Whopper in Maine tastes like a Whopper in Minnesota , Mexico or Madrid. Franchises provide the same quality and customer service across the world.

And it pays off. The U.S. Department of Commerce says that 90 percent of franchises are still operating after 10 years, while 82 percent of independent businesses fail. Franchises can also be extremely successful when the right people are put in charge of them:

  • Domino's Pizza started in Ypsilanti , Mich. , 1960 when Tom and James Monaghan borrowed $500. Tom became the sole owner one year later when he traded James a Volkswagen Beetle for his share in the company.
  • Joe Gold salvaged iron wheels and concrete from a junkyard to turn into weightlifting equipment at the age of 12. He opened Gold's Gym in Venice Beach , Calif. , in 1965. Arnold Schwarzenegger became a customer and the two rose to bodybuilding fame together.
  • Dick and Mac McDonald owned one California hamburger stand until Ray Kroc, the man who sold them their milkshake mixers, encouraged the brothers to branch out to boost his mixer sales. Kroc opened the first McDonald's in 1965.
  • Dave Thomas was an orphan who worked in the restaurant business until he opened the first Wendy's Old-Fashioned Hamburgers in 1969, naming it after daughter Melinda's nickname.
  • Colonel Sanders began franchising his 'secret-recipe fried chicken' in 1952 when he was in his 60s. Driving cross country, he relied on handshake deals and a commission of one nickel per chicken to set his Kentucky Fried Chicken on the road to success.

If you're interested in owning and operating your own franchise, you're in the right place. Read on to learn about the different types of franchises, the legal and financial aspects, some tips for success, and basic information about the entire franchise procedure.