Is the unborrowed investment required of a prospective franchisee. Usually from franchisee's savings or investments, so it is free of interest and repayments. It is simply an indication of the amount, which the bank will not fund, or the level of debt that the business will not be able to service.

MINIMUM TOTAL INVESTMENT (MTI) -

This should represent the minimum total cost of setting up the franchise (i.e.: MPI + borrowings). Working Capital is sometimes included in the MTI.

FRANCHISE TYPE

The franchise type identifies in general the type of work involved in running the franchise. There are four categories.

Retail Franchise

The franchise will occupy retail premises, selling products or services during retail hours for ‘walk-in’ retail. The business is totally dependant on the premises and turnover is achieved from walk-in consumers. Eg: McDonald’s, Bang & Olufsen, Body Shop

Management Franchise

The franchisee will be using their experience to grow the business and control staff who carry out the tasks of the job. It will require premises, which are more likely to be office than a High Street outlet.

The majority of the turnover here is generated from Business to Business activities rather than from retail. Eg: Prontaprint, Select, Minster, Signs Express

Single Operator Franchise / Manual

(Also referred to as Job Franchise), the franchisee will be working at the franchise which usually takes the form of a trade supplying, selling and delivering products or service. It may be mobile, home-based or requiring small office premises. Dyno Rod is : mobile – manual.

Single Operator Franchise / Executive

(Also referred to as a ‘white collar’ Job Franchise), the franchisee will be working at the franchise which usually takes the form of a trade supplying, selling and delivering products or service. It may be mobile, home-based or requiring small office premises. The type of work is executive. Eg: Expense Reduction Analysts are: executive - home-based / premises.

INDUSTRY SECTOR

The product or service of each franchise belongs to a particular industry sector. The industry is currently divided into six main sectors each with subsections.

DEVELOPMENT TYPE

The Development type is the method by which the franchisor wishes to build their franchise network. Therefore they will be recruiting franchisees to fit their desired development type. Sometimes a franchisor may look for more than one way to develop their system.

Master Franchisee

Operates under a master franchise agreement to open a minimum number of units himself and then sub-franchise the brand throughout a Country.

Regional Franchisee

Buys the rights from a master franchisee or the original franchisor to sell franchises in a defined region.

Area Developer

Buys the rights from the original franchisor to develop the system in a defined region. An area developer can not sell franchises.

Unit Franchisee

(Also known as sub-franchisee or franchisee), buys the right to operate a single unit franchise. A unit franchisee may at a later stage buy further unit franchises. If they are of the same brand they are referred to as a multi-unit franchisee.