What is an Online Franchise?

Franchise opportunities can provide a way for aspiring entrepreneurs to get started in businesses that have established markets and business models. A person who buys a franchise opportunity often benefits from the reputation of the franchise and may receive training and other support as well. An online franchise is a franchise business that a person can operate on the Internet. This type of business allows entrepreneurs to use the Internet as their storefronts rather than having to invest in commercial property and the equipment that is often required for running a brick-and-mortar business.

There are many types of businesses that lend themselves to online operations. An aspiring franchisee may choose a business he can run entirely on the Internet, without stocking any products. For example, he may offer online services such as writing, graphic design, tutoring, Internet advertising, business card design, or technical support. An individual who is interested in an online franchise service business may also choose a website design or hosting business or select a business that sells toll-free numbers and online fax lines.

In some cases, a person who wants to start an online franchise may decide on a business that sells products instead of services. For example, he may decide to buy an online CD franchise. Instead of finding a place to store CDs and arranging for shipping, however, this person may buy an online franchise that drop-ships CDs for him. This means his business will basically take the CD orders and process the payments online but will depend on the franchisor or another company to fulfill and ship the orders to the customers.

There are some types of online franchises that are based on the Internet but still require the franchisee to do some of the work of operating the business from a brick-and-mortar location. For example, a person may buy an online franchise that involves selling gift baskets. The franchisee may get all of his customers online through a website that bears the franchise's name, but he may create the gift baskets from his location and ship them to his customers on his own.

Like other types of franchises, online franchise opportunities can be varied. Many experts recommend that a prospective franchisee carefully consider his skills and interests as well as the amount of time he can commit to running an online franchise versus the amount of time that is recommended for the opportunity he is considering. He may also do well to check into the background of the franchise company he's considering, ask questions about its financial and credit status, and speak to current franchisees to learn whether they are experiencing success with the franchise.