A Guide to the Different Types of Franchises


A Guide to the Different Types of Franchises

As an aspiring franchise owner, there are a variety of choices you must consider as you begin.  One of these considerations is to look at the different types of franchises to determine the best fit for you.  With a variety of options, it opens the door for you to find what works with your strengths, lifestyle, and goals.

As we discuss the different types of franchises, begin considering the type of time you have to commit, how much you can begin investing right away, which model would work with your current lifestyle, etc.

We will first begin looking at the two main types of franchises, product versus service, which differ greatly.

Product Franchise

Product franchises are businesses that offer tangible goods that are transferred between the business and the customers.  The products can range from electronics to clothing or toys.

Due to this being a tangible good, it is highly likely that the franchisor will have specific standards that will need to be kept with the franchise.  This could include having a certain standard for the products and being specific who to go through for a supplier.

As we as people enjoy having a physical product in our hand, there is an amazing opportunity to get products within the hands of more people.  Plus, many franchisors have prices already set allowing you more time to focus on other tasks.

Service Franchise

A service franchise is a transfer of a service to a customer or client that primarily assists them.  Some service businesses would be real estate agencies, accounting firms, landscape services and more.

For many service-based industries, they provide more flexibility with time unlike product businesses where you must be open during certain times.  They also tend to have a lower upfront start-up cost which can make them more attractive.

Unlike product franchises, you will most likely have less support.  Typically, you will receive training, but won’t receive the on-going support that product franchises tend to receive.

Owner-Operator versus Semi-Absentee

Another decision to make as you step into being a franchise owner is choosing how you want to operate as a business owner.   As you choose between owner-operator versus semi-absentee ownership, keep in mind what works best with your current life and work situation.


Owner-operator ownership is the most hands-on and laborious ownership.  As an owner-operated owner, you are completely involved in the day-to-day operations within your business.  This doesn’t mean you won’t have a team; it means that you are fully invested in the business.

As an owner-operated business, you would need to be fully invested in the new franchise, which means that it would be hard to have a job outside the franchise.  With the high time commitment, you will be spending significant time each day on the business with the team you hire.

For many new franchise owners, they begin with owner-operated ownership in order to scale and grow to a semi-absentee owner.


As a semi-absentee owner, you wouldn’t need to handle much of the day-to-day operations, like hiring and training employees.  You would hire a manager to take care of the needed tasks that you would prefer for someone else to handle.

As a semi-absentee owner, you need to feel ready to give control to someone else plus find trustworthy people to hire as managers within your operation.

Although semi-absentee may sound like an opportunity to do less, you will still have heavy involvement in other areas of the business, including making key decisions.

Which is the best for you?

Any of the options can have positive outcomes, but the choices will depend on what is best for you.  As you consider product vs service franchise and owner-operator vs semi-absentee ownership, consider what best fits your current life, how much you can invest, your goals, knowledge, and passions.  

There are benefits for all different franchises and each is not right for everyone.  No matter what you choose, we are here to support you through your franchise journey.