This is the beginning of a great article in Entrepreneur Magazine that talks about some of the advantages and disadvantages of a franchise vs. a business opportunity. Our business works very similar to a franchise, but without some of the real constraints put on franchisee. When we were looking for a business we knew that we weren't in a position to either pony up a couple hundred thousand dollars, or be constrained in our operations in any way.
Franchises vs. Business Opportunities
As a rule of thumb, a franchisee receives more support from the parent company, gets to use the trademarked name, and is more stringently controlled by the franchisor. Business opportunities, on the other hand, don't receive as much support from the parent company, generally aren't offered the use of a trademarked name, and are independent of the parent company's operational guidelines.
As we've previously noted, there are numerous forms of business opportunity ventures. Some are even turnkey operations similar to a lot of package-format franchises. These business opportunities provide everything you could possibly need to start a business. They help you select a location, they provide training, they offer support for the licensee's marketing efforts, and they supply a complete start-up inventory.
Unlike a package-format franchise, however, these types of business opportunity ventures aren't trademarked outlets for the parent company. The company's name, logo and how it's legally operated are left solely to the licensee. Many times the only binding requirement between the seller and the buyer is that inventory be purchased solely through the parent company. Of course, all these stipulations are outlined in the disclosure statement and contract.