So you've done a bit of research and you realize that there are many different types of franchise opportunities out there to invest in. Some are attractive, some not so attractive. So if you're contemplating making an investment by affiliating yourself with a franchise, you need to do your homework and research each type of opportunity to protect against an unsuccessful business. You want to invest in a franchise that will do well, and while learning about each type isn't a sure-fire guarantee that you'll make millions in your first year, it certainly won't do any harm.

   Generally franchises can be categorized in two groups. They are known as product and trade name franchising and business format franchising.

   Big blue chip companies and industry names in the gas (petroleum), automobile, soft drinks and beverage sectors can usually be found under the product and trade name franchising umbrella. While the big company supplies the merchandise, logo and trademarks, and usually takes responsibility for some or most of the advertising, the franchisee doesn't pay royalties on sales. The franchisee sells the services or products provided by the manufacturer. In general, the franchiser will assist in the set-up and advise on the best locations for the business, and continue supplying goods and things such as vending machines (with all the servicing needed to keep them operating successfully) and whatever else is required to sell products.

   As the name implies, business format franchising is a way of operating a business by the services provided to the franchisee. The business model relies on the use of trademarks and logos. With business format franchising, the franchisee will locate a site and the franchise company will handle the design and layout of the business.

   It is interesting to note that studies have shown that the color on the walls in an eating area of a fast food restaurant will determine how quickly people will finish their meal. Hence, the quicker people eat the more people they can accommodate in a day. Therefore, franchisers are determined to stipulate to the franchisee something as basic as wall color. The franchiser also has a say in the advertising, training and the service/sales philosophy of the employees.

   Some great examples of this are automotive services, convenience stores, hair salons and hairdressers, fast food chains, real estate agents and recruitment agencies.

   The franchisee will pay a fee up-front at start-up and continuing royalties in return for continued assistance of the franchiser.

   Whichever type of franchise you feel is best, you have to consider how good a salesperson you are and which area you feel you'd be best suited to. Remember, the popularity of a brand name may not translate into immediate success. Franchising may be a great business opportunity, but you should choose your franchise wisely.