Features

• The franchisor provides a recognizable brand name and business expertise to the franchisee. The franchisee pays an initial fee and royalty fees on income to the franchisor. The franchisor controls the quality of the franchisee's business and often dictates the location, site appearance and methods of operation.
  
  

Considerations

• New franchises are more likely to succeed than new independent businesses, according to the U.S. Small Business Administration. However, it is possible to lose money opening or operating a franchise.
  
  

Warning

• Before opening a franchise, research the company. Ask a bank for a financial profile of the company, and ask the Better Business Bureau in the city of the franchise headquarters whether any complaints have been filed against the company. In addition, meet with a lawyer and accountant to read and discuss your franchise contract before you sign it.