What are the alternatives to franchising?

 

WHAT ARE THE ALTERNATIVES TO FRANCHISING? 

In addition to franchising, there are two other popular methods by which businesses expand their market and distribution channels: 

DISTRIBUTORSHIP In a distributorship, the distributor usually: • has a contractual relationship with the supplier • buys from the supplier in bulk and sells in smaller quantities • is familiar with local markets and customers • may do business with many companies, more than just the supplier/producer • may not receive contractual support and training from the supplier/producer like a franchisee Some distribution arrangements are similar to franchises, and vice versa. A franchisee with a great deal of leeway in how to run the business may look like an independent distributor. A distributor may be subject to many controls by the supplier/producer and begin to resemble a franchise. 

Some popular distributorships include: 

  • Amyway 
  • Coloe Me Beautiful Cosmetics 
  • Mountain Life Spring Water 
  • Knorr Soup Vendor 
  • Campbell's Soup Vending Machines 

LICENSING Licensing, on the other hand, allows a licensee to pay for the rights to use a particular trademark. Unlike franchises, in which the franchisor exerts significant control over the franchisee’s operations, licensors are mainly interested in collecting royalties and supervising the use of the license rather than influencing the operations of the business. Check out www.licensing.org. 

Some popular licensors include:  

  • Netscape Communications 
  • Apple Computer 
  • Canon Inc.  
  • Woolmark  

NEXT STEPS 

The International Franchise Association has over 1,400 franchisor members, representing 100 unique business categories, listed on our site.  If you are considering whether or not to go into business for yourself, but not by yourself, we are confident that you will find a number of franchise systems that might be a good fit for you.  To begin your search, visit our franchise opportunties section - click here 

 

For more information on the franchising business model, click here  

 

 

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Lynette McKee, CEO at McKeeCo Services, LLC, has been inspired to take chances because of the role model in her...
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