Business opportunity facts

All franchises are a business opportunity, but all business opportunities are not franchises. A business opportunity, in the simplest form, is the sale or lease of a product or service that enables the purchaser to start their own business. It is not a franchise and it is not an independent business because the licensor (seller) assists the licensee (purchaser) in finding a suitable location to sell the product or service.

A business opportunity is different from a traditional franchise because it doesn't involve a trademark and the licensor (seller) offers location assistance. A business opportunity offers a lower fee than a franchise and doesn't include royalty payments, but business opportunities may receive less training and marketing support. Business opportunities also are less time demanding than a franchise.

If it sounds too good to be true, it probably is. Don't get sucked in by "get rich" schemes. Research the company and have a lawyer to review any documents you receive.

The FTC has proposed a new rule that requires all business opportunities, regardless of the initial fee amount to provide potential purchasers with a disclosure document.