What is franchising?
A franchise is a legal and commercial relationship between the owner of a trademark, service mark, trade name or advertising symbol and an individual or group seeking the right to use that Identification in a business. The franchise agreement governs the method for conducting business between the two parties. Although forms of franchising have been in use since the Civil War, enormous growth has occurred more recently. Industries that rely on franchised businesses to distribute their products and services touch every aspect of life, from automobile sales and real estate to fast foods and tax preparation. In its simplest form, a franchiser owns the right to a name or trademark and sells that right to a franchisee. This is known as product/trade name franchising. In the more complex form, known as business format franchising, a broader and ongoing relationship exists between the two parties. Business format franchises often provide a full range of services, including. Site selection. Tra
Franchising is a method of distributing products or services. At least two levels of people are involved in a franchise system: (1) the franchisor, who lends his trademark or trade name and a business system; and (2) the franchisee, who pays a royalty and often an initial fee for the right to do business under the franchisor’s name and system. Technically, the contract binding the two parties is the “franchise,” but that term is often used to mean the actual business that the franchisee operates.
The act of Franchising involves two or more parties or individuals. The franchisor owns the product, services and systems offered for sale and the franchisee or purchaser buys the right to use a trademark in their own business using the name of the franchisor, logos, systems, concepts and more as provided in the franchise agreement. Franchising offers the franchisee the freedom to exercise the powers of a corporation through the operation of one’s own business.
Franchising is the legal right to carry out a business in accordance with a particular operational method and under a specific brand. This includes the right to use trademarks, logos, a business system, operating procedures, IT and marketing techniques. It can be seen as you working for yourself and running your own business; however, you go to market with the benefits of a household name and a dedicated team supporting you with advice and guidance on how to operate effectively.
