Often franchise buyers become interested in a certain type of business and brand in the franchising sector. They've always considered owning a business of their own, but never really had the experience to quit corporate life and go for it. Franchising seems to be the answer, and they when they see a concept or brand name which they are drawn to they start to do a little more research. What they typically end up finding is that there are several competing companies for that exact same niche.

Some of these companies are nothing more than "copy companies" and some of them may be the original, but the company that caught their eye with the strongest national brand name is actually an imitator which has done better in the market place. Either way they look through the catalog of all the potential franchises to buy and they know some are cheaper than the others. That is to say their franchise fee and royalty structure is less.

However, often, you get what you pay for with regards to royalty fees, and many competing companies try to match their competitor's franchise fees, as they vie for the same franchise buyers. You must be very careful however when choosing a franchise to buy amongst the many choices. After all, if you choose a West Coast franchisor and you live on the East Coast where there are no stores, the brand name may not be recognized, and therefore, you have to do all the work to build up in your area.

If this happens, you are not gaining any benefit or value as a franchise brand name, rather it is your job to build up the franchise name in your trading area. So, it might make sense to buy the more expensive franchise which has a stronger brand name where you are. This is a serious consideration, and more franchise buyers need to be thinking here. Please consider it.

Lance Winslow is a retired Founder of a Nationwide Franchise Chain, and now runs the Online Think Tank. Lance Winslow believes in franchising.

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