Buying a Franchise versus a Business Opportunity
How to tell the difference between a franchise and biz opp and determine which is the better fit for you.
The primary differences mentioned by the author are:
- Common Brand and Operating System
- Ongoing Support
- Ongoing Fees
- Legal Disclosures
Basic stuff, but it is what you are paying for as a franchisee. If you feel able to pursue a business opportunity and can do so without piggy-backing on another brand, operating system, and support, then you may be better off going it alone and foregoing the franchise fees, royalty fees, advertising fees, operational constraints, and required purchases.
Update 7-10-2007: Good comment by the always alert Michael Webster:
The article was terrible. It leaves the misleading impression that there is such a catergory as biz ops which don’t have to prepare a UFOC. Uh, well then how would one account for the fact that the FTC routinely closes biz ops because the failed to comply with the Franchise Rule? Really bad article.”
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Ryan is an attorney and valuation specialist residing in Chicago. He chronicles his thoughts and research on FranchisePundit.com. You may reach him by email ryanknoll@gmail.com or mobile telephone 312-715-8115.
Ryan,
The article was terrible.
It leaves the misleading impression that there is such a catergory as biz ops which don’t have to prepare a UFOC.
Uh, well then how would one account for the fact that the FTC routinely closes biz ops because the failed to comply with the Franchise Rule?
Really bad article.
Michael Webster wrote on July 9, 2007 @ 6:10 pm:
Thanks, Michael. Admittedly, I skimmed the article and assumed bizop was referencing a purely entrepreneurial endeavor without a pseudo-franchisor. Thanks for the heads up.
Michael Webster wrote on July 9, 2007 @ 6:10 pm:
The author from what I can tell is not falling within the definition of most franchise statutes. Selling a “guide” on how to conduct a business and offering “consulting” services in connection to it is not considered franchising.
Anonymous;
I have no idea what you are talking about.
Check out some of the bizops referred to in the article – UFOC required.