This book provides an in-depth and comprehensive look at franchising. The authors’ combined 75 years of franchise practice and 55 years in academia forged an authors’ alliance that resulted in Franchising: Pathway to Wealth Creation. We argue that franchising embodies entrepreneurial zeal, a scalable business model, a complex and dynamic strategic alliance between franchisor and franchisees, and great wealth creating potential. Franchising also uniquely fulfills a wide spectrum of entrepreneurial appetites. If you wish to grow your idea into an international behemoth, franchising may serve as a vehicle. However, if your dream is to operate a single outlet in your hometown, franchising may also be right for you.

The word “franchise” is one of the most misunderstood and abused words used in the conduct of commerce. It is used to describe the value of an individual or a brand, or to describe a relationship. Seldom, if ever, is it used to expound on the potential to build a robust professional and economic life. Some of the confusion rests on the fact that franchising always involves at least two entities, the franchisor and the franchisee. The popular press tends to focus on the tension and litigation in franchising. Many business schools tend to ignore it. Most people are confused as to the difference between the two. But franchising has been an important part of new venture growth and expansion for almost half a century. Have no doubt, we believe there is vast wealth creating potential in franchising. But even for those who agree with us, there is a tendency to focus attention of the franchisor and ignore the entrepreneurial aspirations of the franchisee.

The three of us are often asked the question: Is franchising entrepreneurship? Certainly, most people would agree that Ray Kroc, founder of the giant restaurant chain MacDonald’s, or Anita Roddick, The Body Shop founder, were entrepreneurs. But their companies are the franchisors, the owner of the trademark and business model. What about the franchisees, those individuals who buy a franchise, implement the concept on a local basis, and serve customers? Are they entrepreneurs?

The answer to the question is based on more than linguistics. The central issue regards the ability of the franchise to create wealth. Clearly, there are no guarantees of wealth when a new venture is founded. Return and risk are the balancing force controlling the entrepreneurial process and therefore the potential of failure looms in any business start-up, balanced by the prospect of wealth. However, if the buyer of a franchise is simply purchasing employment, then a franchise is no more than an alternative to an employment agency. Most people invest a substantial portion of their personal assets to buy a franchise. It would be irrational to do so just for a job.

We wrote this book to answer a number of key questions about franchising. Yes, franchisor and franchisee are entrepreneurs. If they are to be successful entrepreneurs, they must understand the skills and motivations of each other and work together. And the best franchises are driven to create wealth for both of the strategic partners. This book contends that focusing your intellectual lens on only one partner is analogous to covering one of your eyes while playing a sport. You lose depth perception and peripheral vision. You may still win the game but you unnecessarily stack the odds against yourself. The principal objective of this book is to turn those odds in your favor. We want you to consider franchising as a viable option for the creation of wealth. Our involvement with the establishment of franchise systems, the proliferation of new franchises, and profitability as franchisees spurs our efforts. Recently, we have seen an increasing number of multiple outlet franchisees. Some franchisees achieve both growth and diversification by operating multiple franchise concepts. There seems no end to the possibility for those who are dedicated to understanding the complexity and potential of franchising.

The authors of this book come from vastly different backgrounds but remarkably similar experiences with franchising. Each has been involved in the launch, growth, and financing of franchise companies. We have also been deeply committed to higher education. Teaching, researching, and writing about phenomenon in entrepreneurship and especially franchising at the graduate level has inspired our belief that would be entrepreneurs are ready for a rigorous discussion of franchising.

We hope you will find Franchising: Pathway to Wealth Creation a useful tool, a dynamic guide, and a challenging read. But mostly we hope you focus your passion on a franchising opportunity that fulfills your entrepreneurial dreams and results in wealth creation for you and your stakeholders.