• Franchising is a method of distributing goods and services
  • A Franchise is a privilege granted to an individual or a Corporation
  • A franchise is a legal agreement between two parties
  • The owner who agrees to grant the privilege is called the Franchisor
  • The individual or group to whom the privileges are granted by the Franchisor are called the Franchisees
  • The system under which Franchisor and Franchisee operate is known as Franchising.

Companies choose to grow by granting a license to others to sell their product or service and this has advantages for Franchisees too: A Franchisee does not have to come up with a new idea – the Franchisor had it and tested it and continues working on new ones.

If properly executed, franchising is a win-win situation. There are significant advantages to Franchisor, Franchisee and the consumer. For a prospective Franchisee, it represents an opportunity to own and operate a business involving a proven concept, product, or business format with a minimum of financial risk. For potential consumers, franchising provides a way to receive goods and services in a reliable and predictable manner.

A Franchisee also benefits from consumer recognition of the Franchisors Trademark and products.

The big advantage of franchising shows this statistic: 75{481076ee53a1fc97de0369f33ed2e92f10b25aa7745daa7b1993dd39620a4254} of all independently owned businesses don’t survive the first five years, in franchising only 5{481076ee53a1fc97de0369f33ed2e92f10b25aa7745daa7b1993dd39620a4254} have the same faith.





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