| There are two types of franchises: | | | | Business Format Franchises |
| 1. Product Distribution Franchises | | | | In these, the franchisee uses the franchisor's brand |
| 2. Business Format Franchises | | | | name and trademark. And most importantly, the |
| The most important part of product distribution format | | | | franchisee uses the entire business system of the |
| is the product manufactured by the franchisor. Some | | | | franchisor. This format helps in achieving consistency |
| pre-sale preparation is often required on the franchisee | | | | which results in sustained success. In this structure, the |
| end before they are sold. Another major difference | | | | franchisee is provided with a detailed plan which |
| between the two types is that in the product | | | | explains almost everything related to the operation of |
| distribution type, the franchisor licenses its trademark | | | | the franchise. The franchisee is given the training about |
| and logo to the franchisees but does not provide the | | | | the management of the building, marketing and |
| entire system to run the business. In the business | | | | advertising of the franchise, recruitment, dressing of |
| format ones, the whole system is provided by the | | | | the staff, greeting the customers and every other thing |
| franchisor to run the business. Most of the franchises | | | | related to the franchise operation. |
| these days are business format franchises. In the | | | | Both of these types have their pros and cons. Only |
| United States, 80 percent of the total 770,000 | | | | hard work and good interest in your business can |
| franchised businesses are business format franchises. | | | | guarantee your success. The franchise technology has |
| Product Distribution Franchises | | | | grown significantly lately. You can use franchise |
| In these, the franchisees sell the franchisor | | | | management software to make your experience a |
| manufactured products. These can often be found in | | | | much successful one. These softwares simplify the |
| the drinks, automobiles and automobile accessories | | | | nature of running the franchisor business model. The |
| industries. These look somewhat like the supplier-dealer | | | | main features, good franchise software provides are |
| relationship. But in product distribution franchises, the | | | | data collection, corporate communications, |
| franchisee gets more services from the franchisor as | | | | administration, new store management, and marketing |
| compared to what a dealer will get from its supplier. | | | | management, thus making your life easy. |