Comparison guide

Franchise, business opportunity or sales partner: what's the difference?

People looking for a business of their own often compare very different things under one search: buying a franchise, buying a "business opportunity", buying an existing business, or becoming an independent sales partner for a company. They differ in what you pay, what you own, how much control you have and which laws protect you. This guide sets them side by side. It is general information, not legal advice.

On this page
  1. Side by side
  2. Franchises
  3. Business opportunities
  4. Buying an existing business
  5. Commission sales partners
  6. Where the Territory Partner pilot sits
  7. How to compare offers
  8. Questions

Side by side

Side by side
FranchiseBusiness opportunityExisting businessCommission sales partner
What you get Rights to run a business under a brand and system A package to start a business, such as equipment, accounts or locations The business itself: customers, assets, staff The right to sell another company's product and earn commission
Typical upfront cost Franchise fee plus setup, often substantial Varies; often a required payment Purchase price Often none
Who owns customers You, under the brand's rules You You Usually the company you sell for
Ongoing payments Royalties and marketing fees are common Varies None to a seller None; you are paid
Control Follow the franchisor's system Varies Full Within the company's sales rules
Disclosure rules Franchise laws in many places Business opportunity rules in some places General contract law Depends on the facts and the place

Franchises

A franchise usually combines a brand, a business system the franchisor controls, and a fee. Many places require the franchisor to give buyers a disclosure document before they sign or pay. In the United States that is the FTC Franchise Rule plus some state laws; in Canada, several provinces, including Ontario and Alberta, have their own franchise acts.

Youth sports franchises typically involve running programs yourself: leagues, camps, classes or clinics under a brand. That is operating a sports business, which is different from selling software to clubs.

Business opportunities

In the United States, the FTC's Business Opportunity Rule covers certain sellers who ask for a payment and say they will provide locations, accounts or customers, or buy back what you produce. It requires disclosure and restricts earnings claims. Some states have their own rules.

Buying an existing business

You buy a running business: its customers, cash flow, assets and obligations. Due diligence, financing and a lawyer's review of the purchase agreement are the main protections.

Commission sales partners

You sell another company's product and are paid on results. You usually don't buy anything and don't own the customer. The risk is your time: if nothing closes, you aren't paid.

Where the Territory Partner pilot sits

Play 2 Earn Sports' Territory Partner program is a small franchise: partners pay a one-time territory fee (about CAD 5,000 in Ontario), clubs sign with Play 2 Earn Sports, and partners earn a share of the fees actually collected. In Ontario this is a franchise under the Arthur Wishart Act. Because the total initial investment is $15,000 or less, no disclosure document is required, but the Act's duty of fair dealing still applies. We don't sell territories where a disclosure document or registration would be required, including British Columbia, Saskatchewan and several US states. There you can join as a Sports Ambassador instead, which has no fee. It is not a business for sale or a club or league to run.

Whether any arrangement is regulated as a franchise or business opportunity depends on its actual terms and on the law where it is offered, not on its name. We are having the program reviewed by counsel in each place it may launch, and we make no claim that it is exempt from these rules.

How to compare offers

  • Ask for every payment you would make, now and later, in writing.
  • Ask what you own if you leave.
  • Ask whether earnings claims are backed by documented results.
  • Read the disclosure document if one is required, and have a lawyer review it.
  • Check the official sources below for the rules where you live.

Questions

Can a commission sales role replace buying a franchise?

It is a different arrangement with different trade-offs, not a substitute you can assume is equivalent or exempt. Compare them on cost, control, ownership and legal protection.

Do I need a lawyer?

For any franchise, business purchase or business opportunity, and for any agreement you aren't sure about, an independent lawyer's review is worth it.

Official sources

Know your local sports scene?

See how the proposed Territory Partner pilot works, run your own numbers, and tell us about your area.

Territory Partner Program