What’s the Difference Between a FedEx Business and a Franchise?

As with all business opportunities, buying a FedEx route requires preparation and research. This includes learning about the different types of routes, financing options, and requirements of the approval process.

It also calls for a complete understanding of the differences between a FedEx business and franchise. In fact, this might be the most important thing you should research before moving forward.

What is a Franchise?

A franchise is a business owned by a private entrepreneur who sells goods or services from a corporation. The entrepreneur is called a franchisee, while the corporation is called the franchisor. The franchisee pays franchise fees, along with a portion of their profits.

Since goods and services are marketed under the corporation’s name, the franchisee doesn’t need to worry about promoting the business to the public. The concept, logo, and branding of the corporation are already established. Moreover, the franchisee receives guidance and support from the franchisor.

As a consumer, you’ve bought goods or services from franchise businesses many times. Examples of popular franchises include McDonald’s, Dunkin’, Taco Bell, Dominos, and 7-Eleven. These businesses have an established reputation, ensuring that they have the trust of consumers across the country.

About Buying a FedEx Franchise

The description above might sound like a FedEx route business. After all, FedEx drivers wear uniforms (and drive vehicles) with the internationally recognized FedEx logo. Route owners can also receive support and resources from FedEx, just like franchisees do from corporations.

So, what’s the difference between a FedEx business and franchise? Well, that’s a trick question—because FedEx franchises do not exist.

Here’s why: Franchisees pay a fee to distribute the products or services under a corporation’s name. All franchisees operate their businesses in the same way, according to the corporation’s regulations.

FedEx route owners establish their own corporation, then purchase and own that route. They service that route according to their own operational procedures. This includes everything from solving issues and optimizing profits to hiring employees and managing vehicles.

What’s more, though route owners do follow certain FedEx guidelines, they are essentially running their own small business. They also don’t pay a franchise fee.

Buy a FedEx Route Today

As you can see, there are major differences between a FedEx route business and franchise; the latter doesn’t exist! Operating a route follows an independent contractor business model, so it’s essential to learn how it works before buying a FedEx route.

We invite you to visit the KR Capital blog to learn more about the process. Should you decide to move forward, our team is ready to help. Contact KR Capital at (503) 664-0753 or complete our contact form today.