How do I tell the difference between a franchise and a biz op?

When operating a under a franchise, you operate under a common brand and operating system.

This means that no matter where you are, if you visit a particular franchise the products or services will be the same. You pay an initial franchisee fee and set up costs and once trading continue to pay fees in the form of royalties (which are usually a percentage of your turnover).

With a franchise you are required to follow to follow systems and procedures and established franchises will have operations teams visit you periodically to provide training, support and ensure you’re sticking to the programme.

A biz op on the other hand, doesn’t require owners to operate under a common brand, but some biz ops give the option. You pay for the rights to the brand and may receive support but the biz op is not required to provide any. Unlike a franchise, a biz op is not required to prepare and deliver any document like the disclosure document, so make sure you do thorough homework before committing.

Tracy Lee Nicol
About the Author
Tracy-Lee Nicol is the managing editor of Franchise Zone Magazine and deputy editor of Entrepreneur Magazine. She studied her Masters degree in Art History and Visual Culture at Rhodes University and spent the next two years working and travelling in Asia. Her love of people, business and teaching is reflected in telling the stories of entrepreneurs, franchisees and franchisors, inspiring others to take the leap to being their own boss and bringing about positive change in South Africa.

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