n the food and beverage industry. Most bottlers of soft drinks receive a franchise from a company and must use its ingredients to produce, bottle, and distribute the soft drinks. Business Opportunity Ventures: These ventures typically require that a business owner purchase and distribute the products for one specific company.(4) The company must provide customers or accounts to the business owner, and, in return, the business owner pays a fee or other consideration as compensation. Examples include vending machine routes and distributorships. Business Format Franchising: This is the most popular form of franchising. In this approach, a company provides a business owner with a proven method for operating a business using the name and trademark of the company.(5) The company will usually provide a significant amount of assistance to the business owners in starting and managing the company. The business owner pays a fee or royalty in return. Typically, a company also requires the owner to purchase supplies from the company. One of the main benefits of franchising is lower risk. Most business experts agree that a franchise operation has a lower risk of failure than an independent business. A reason for this is that the product or service is already established. A franchisor offers a product or service that has sold successfully. An independent business is based on both an untried idea and operation. Three factors will help you to predict the potential success of a franchise. The first is the number of franchises that are in operation. The second predictor is how long the franchisor and its franchisees have been in operation. A third factor is the number of franchises that have failed; including those bought back by the franchisor.(6) Another benefit of franchising is a large degree of assistance. The most difficult aspect of a new business is start up. Few experienced managers know about how to set up a new business because they only do it ...
