The initial investment requirements must be reasonable in order not to strap new franchisees for working capital. Remember, franchisees have to finance the business start-up plus a few months' expenses while the business is getting established. The franchisee's initial investment must be reasonable in light of the necessities of the business and its profit potential. A Service Business Service businesses offer franchisors many advantages that businesses in other sectors of the economy do not possess. They often require a modest capital investment to establish and maintain, and provide the degree of adaptability that franchisors often need to succeed in today's turbulent business environment.
Many successful franchises are therefore in the service sector.
The franchise will either offer new products, better versions of old standards, or will develop new formats or strategies for the sale of established products or services. All in all, there must be a market for the product or service. There Must Be a Prototype. Most successful franchises start with a prototype, or model unit upon which subsequent ones are based. They are invaluable in establishing the legitimacy and profitability of your business, and also serve as the experimental laboratory in which the business is developed and refined.