Is it a Franchise or a Business Opportunity?

What is the difference between a franchise and a business opportunity? This is a question that is often asked and can easily be determined by the specific criteria that differentiate the two.

In its basic form, a franchise is a proven business model where the franchisee pays a fee to the franchisor for the opportunity to be trained by them on how to run the business. As a franchisee, you will have use of the franchisor’s trademark, which is their name and logo in selling the products or services of that brand. The franchisor will provide assistance to you both before you open and during your operation of the business, and you are required to make on-going management services fees in exchange for your right to operate the business and receive the support from the franchisor. The franchisor will have control over certain aspects of how the business is operated which is governed by the franchise agreement.

A business opportunity on the other hand consists of a marketing plan, training programme and/or pre-arranged collection of goods or services that the opportunity seller offers to aspiring entrepreneurs for purposes of allowing the entrepreneurs to go into business for themselves. Business opportunities often have much lower initial fees, and generally do not entail on-going management services fees. The buyer is free to market under its own trademark and business system, and the seller has no on-going obligations to the buyer. Thus, once the business opportunity is sold, that is generally the end of the parties’ formal relationship.

So, now that you understand the differences between franchises and business opportunities, which one is best for you?

kevKevin Antonie

CEO

SA Franchise Brands

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