THE BASICS OF FRANCHISING

Share this on Social Media

  • 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.

 

 

 

 

(This disclaimer informs readers that the views, thoughts, and opinions expressed in the text belong solely to the author, and not necessarily to the author’s employer, organization, committee or other group or individual.)

 

Leave a Reply

Your email address will not be published. Required fields are marked *