Choosing the Right Franchise

The Difference Between Traditional Franchising and Business Format Franchising

Woman standing by a high-rise window with her arms crossed

Franchising refers to the business expansion method of licensing the rights to sell products and services to franchisees. But there are two different types of franchising that each have their own pros and cons: traditional franchising and business format franchising.

Traditional Franchising

Traditional franchising, also known as product distribution franchising, is found most commonly in bottling, gasoline and automotive industries. If you choose a traditional franchising opportunity, you should expect a looser tie to your franchisor. Generally, they are only responsible for manufacturing and/or supplying the product.

Pros of Traditional Franchising

One of the benefits of a traditional franchising opportunity is you have more control over the product you will be selling because it will generally need pre- and post-sale service. This gives you the freedom to make necessary adjustments. You will also be able to act independently of other franchises and develop your own modes of operations. If your main motivation for franchising is to be an autonomous business owner, traditional franchising might be for you.

Cons of Traditional Franchising

The biggest drawback of traditional franchising is the lack of support. Your franchisor will only supply you with the product. They won’t provide you with any training, operational systems, marketing strategies or ongoing support. If you are making your first foray into entrepreneurship and desiring more support systems, a traditional franchising opportunity probably isn’t the right fit for you and your goals.

Business Format Franchising

Business format franchising provides you with varying levels of training, operations guidance and support, depending on the franchise brand. You should expect to have frequent contact with your franchisor and be held to brand-wide standards. This type of franchising is found in many industries and America’s Best Franchises can help you find the business format franchising opportunity that is a perfect fit for you.

Pros of Business Format Franchising

The main perk of investing in a business format franchising opportunity is the level of support you get from your franchisor. It all starts with training. Your franchisor will have a definitive training program to provide you with the skills you need to run this specific franchise. Beyond training, you will be provided with an operations manual that gives you all of the information you need to run your franchise on a daily basis. For some franchise brands, ongoing support includes marketing support, regular calls with the corporate office and a blueprint of proven processes to follow.

Cons of Business Format Franchising

While there are many upsides to the level of support you get with business format franchising, it also means that your franchisor will have more of a say in how you run your business each day, what goals you need strive for and the ways your business will change over time. If the idea of answering to a franchisor rubs you the wrong way, business format franchising might not be for you.

Whether a traditional franchising opportunity or a business format franchising opportunity seems like a better fit for you, America’s Best Franchises has all sorts of franchises for you to explore. Check them out!

Pending Request