- "Franchising is based on a marketing concept which can be adopted by an organization as a strategy for business expansion."
Learn about franchise business model including the rights, obligations, and responsibilities of both the franchisor and franchisee.
Franchise agreements: A legal contract outlining the terms and conditions between the franchisor and franchisee.
Franchise disclosure documents: A document detailing the franchise's financial performance, obligations, and risks.
Franchisor support: The level of support offered to franchisees from the franchisor.
Franchise fees and royalty payments: The initial purchase price and ongoing fees paid to the franchisor.
Territory and exclusive rights: The geographical area that franchisees are given to operate in and the exclusivity of their rights within that area.
Training and support: Education and resources provided to franchisees to help them run their businesses.
Marketing and advertising: Initiatives taken by the franchisor to promote the brand and attract customers.
Franchisor and franchisee relationship: The roles and responsibilities of both parties in a franchise agreement.
System standards and operating procedures: The processes and procedures franchisees must follow to maintain consistent quality across all locations.
Site selection and the lease negotiation: The process of finding and securing a location for the franchise.
Franchise financing: Options for financing the purchase of a franchise, such as loans and grants.
Intellectual property: Protection of the franchisor's brand, trademarks, and other intellectual property rights.
Exit strategies: Options for exiting a franchise agreement, such as selling the franchise or terminating the agreement.
Franchise resale: The process of transferring ownership of a franchise to a new owner.
Legal considerations: Understanding the legal obligations and requirements of owning and operating a franchise business.
Product Distribution Franchise: This type of franchise involves the franchisor selling products to the franchisee, who in turn sells the products to end customers.
Business Format Franchise: This type of franchise involves the franchisor not only providing the products or services but also providing the franchisee with a system for operating the business.
Management Franchise: In this type of franchise, the franchisor provides the franchisee with a management system for the business. The franchisee is not required to provide any specific products or services.
Investment Franchise: An Investment franchise has the franchisor providing investment options for the franchisee. The franchisor handles the running of the business and the franchisee provides the funding.
Conversion Franchise: This type of franchise sees the franchisor acquiring an existing business and turning it into a franchise.
Multi-Unit Franchise: This type of franchise involves the franchisor allowing a single franchisee to operate multiple locations.
Area Representative Franchise: In this type of franchise, the franchisor designates a franchisee to oversee a specific geographic area, selling franchises and providing support to other franchisees.
Master Franchise: A Master franchisee is responsible for establishing and managing franchises within a specific geographic area.
Joint Venture Franchise: In this type of franchise, a new business entity is formed between the franchisor and franchisee, and both parties work together as partners to operate the franchise.
Co-Branding Franchise: This model lets two or more franchisors collaborate on a single location.
- "A franchisor licenses some or all of its know-how, procedures, intellectual property, use of its business model, brand, and rights to sell its branded products and services to a franchisee."
- "The franchisee pays certain fees and agrees to comply with certain obligations, typically set out in a franchise agreement."
- "Adopting a franchise system business growth strategy for the sale and distribution of goods and services minimizes the franchisor's capital investment and liability risk."
- "Franchising is rarely an equal partnership, especially in the typical arrangement where the franchisee is an individual, unincorporated partnership or small privately-held corporation, as this will ensure the franchisor has substantial legal and/or economic advantages over the franchisee."
- "The usual exception to this rule is when the prospective franchisee is also a powerful corporate entity controlling a highly lucrative location and/or captive market."
- "Under specific circumstances like transparency, favorable legal conditions, financial means, and proper market research, franchising can be a vehicle of success for both a large franchisor and a small franchisee."
- "Thirty-six countries have laws that explicitly regulate franchising."
- "The majority of all other countries have laws which have a direct or indirect effect on franchising."
- "The word franchise is of Anglo-French derivation—from franc, meaning 'free'—and is used both as a noun and as a (transitive) verb."
- "For the franchisor, use of a franchise system is an alternative business growth strategy, compared to expansion through corporate owned outlets or 'chain stores'."
- "The franchisee pays certain fees and agrees to comply with certain obligations, typically set out in a franchise agreement."
- "Franchising is also used as a foreign market entry mode."
- "A franchisor licenses some or all of its know-how, procedures, intellectual property, use of its business model, brand, and rights to sell its branded products and services to a franchisee."
- "Adopting a franchise system business growth strategy for the sale and distribution of goods and services minimizes the franchisor's capital investment and liability risk."
- "This will ensure the franchisor has substantial legal and/or economic advantages over the franchisee."
- "Transparency, favorable legal conditions, financial means, and proper market research are specific circumstances that can lead to successful franchising."
- "Franchising is rarely an equal partnership, especially in the typical arrangement where the franchisee is an individual, unincorporated partnership or small privately-held corporation, as this will ensure the franchisor has substantial legal and/or economic advantages over the franchisee."
- "Adopting a franchise system business growth strategy for the sale and distribution of goods and services minimizes the franchisor's capital investment and liability risk."
- "Prospective franchisors must then compete to exclude one another."