What are some different types of franchising?

Asked on by egordon6

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pohnpei397 | College Teacher | (Level 3) Distinguished Educator

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There are many different ways to think of “types of franchising.” 

For example, the franchisee can buy the rights to different numbers of stores.  The franchisee can buy the right to just one store or they can buy the right to many stores.  These are different types of franchises.

Another way to answer the question is by the differences in what the franchisee is allowed to do.  When looked at like this, there are four different types of franchise.

  • Business format franchises.  This is like fast food restaurants where the franchisor gives the franchisee the right to use its name and trademark. 
  • Product franchises.  In this type, the franchisor gives the franchisee the right to sell products that the franchisor makes.
  • Manufacturing franchises.  Here, the franchisor gives the franchisee the right to produce goods with the franchisor’s trademark.
  • Business opportunity franchises.  Here, the franchisee pays for products made by the franchisor and for a set of customers to whom to distribute the products.

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