What Is Franchising and its Benefits
The method of doing business where the licensed trademarks, systems and methods of doing business by a franchisee is being followed by a franchisor in exchange for a recurring consideration like a royalty fee or a franchise management fee, is called franchising.
Franchising is another form of business by which a product, service or method of a franchisor is being obtained by a franchisee. In this business, the franchisor is expected to give assistance to the franchisee in organizing, training, merchandising, marketing and giving direction about the business for a certain amount.
In franchising, there is usually a contractual agreement between the franchisor who is a wholesaler or manufacturer or a service sponsor, and a retail franchisee where it is allowed to conduct the specific kind of business, under an established name and the same pattern of business.
A Simple Plan: Options
Considered as the most popular and the fastest growing business economic model is franchising. A proven method of doing business is the sharing of brand identification, and this has proved to be successful in marketing and distribution system that allows people to work together. Usually, when people think of a franchise, they immediately think of the fast food business. But this is now changed today as franchising has expanded to beyond burger and fried chicken restaurants. Nowadays, the franchise concept has spread to more than 70 various products and services like auto repair shops, children’s art centres, fitness clubs, law and consulting practices and other home based businesses. There is now an increased opportunities for global companies and individual entrepreneurs too in following the business model of franchising, and thus it is turning into a major economic engine in the world.
A 10-Point Plan for Sales (Without Being Overwhelmed)
Franchising has several advantages. Number one advantage of franchising is that you are investing in a proven business already. Another key attractions in franchising are that there is a faster start up of the business, a customer base is developed also faster, and you experience profitability quicker. The good thing about franchising is that the model has already a known and proven formula that is quantifiable. Another advantage of franchising is that there is an owner transition and training as well as a full control of a direction with strategies, plus with the ability to review thoroughly the past records and history of the company.
Considered as the biggest advantage of franchising is the reduced amount of risk an entrepreneur take for his or her investment. With franchising, the franchise company can purchase goods and supplies in bulk thus giving you better deals and savings, as well as to the other franchise units, and this is a great arrangement. And lastly, but definitely not the least advantage in franchising, the customers of the franchised product or service are dealing with the known rather than the unknown, and this makes customer patronize the franchise.