What Is A Franchise?
A franchise is simply a successful company with a proven track record looking to expand. The owner wants to grow by offering entrepreneurs the opportunity to partner with them. They will supply the systems, look, branding, products, training, and ongoing support in exchange for an initial fee called a Franchise Fee and a share of the revenue, known as a royalty. Starting a business from scratch can be very challenging. The good news? Franchising can make your job easier, your level of success can be greater, and you can achieve a higher level of success.
Two common forms of franchising are
Product/trade name franchising:
The franchisor owns the right to the name or trademark of the business being franchised and sells the right to use that name and trademark to a franchisee. This style of franchising normally focuses on supply chain management. Typically, products are manufactured or supplied by the franchisor and delivered to the franchisee to sell.
Business format franchising:
The franchisor and franchisee have an ongoing relationship. This style of franchising normally focuses on full-spectrum business management. Typically, the franchisor offers services like site selection, training, product supply, marketing plans, and sometimes, even help with funding.
When you buy a franchise, you get the right to use the name, logo, and products of a larger brand. You’ll also get to benefit from brand recognition, promotions, and marketing. But, it also means you have to follow rules from the larger brand about how you run your business.
Systems and Support
Great franchises provide systems and support. Tools that make it easier for you to obtain customers, service those customers and maintain a high level of customer satisfaction. You are expected to manage the day to day activities to build a great reputation.