Business Format Franchise Is The Most Common Form Of Franchising Essay

A franchise is a legal agreement between franchisers and franchisees that consents use of the franchise’s trademark and trade name or marketing plan

1. Franchisees gain numerous advantage when they purchase a franchise. First, while a franchisee may be opening a new store, it is part of an already established business and system. This means a franchisee has access to turnkey operations, allowing an increased speed to establishing and growing the business. Franchisees also get support for management and training activities, as well as financial assistance. Going hand in hand with this, a franchise already has an established brand name, quality of goods and service which have been standardized across the franchisor’s larger company, and national advertising programs from franchisors. Franchises also have large-volume, centralized buying power. A franchise has proven products, and

The franchise marketing is introduced to the business market from quite a long time. It is to be noted that while expanding the business entity over the global competitive market, the local companies sell

While doing some research I found that a franchise agreement is a binding legal contract that is signed between a franchisor and franchisee. A franchisor is the company owning the rights to grant franchises to franchisees, while a franchisee is a person or entity who is given the right to conduct business by a franchisor or licensor. The most important definition however is that of a franchise which is an authorization granted by the government or company to an individual or group allowing them to carry out certain commercial activities.

You pay a franchise fee and you get a format or system developed by the company (franchisor), the right to use the franchisor’s name for a limited time, and assistance. For example, the franchisor may provide you with help in finding a location for your outlet; initial training and an operating manual; and advice on management, marketing, or personnel. The franchisor may provide support through periodic newsletters, a toll-free telephone number, a website, or scheduled workshops or seminars.

The first choice of business is the franchise. In a franchise, legal binding agreement is entered into between two firms, the franchisor (the product or service owner) and the franchisee (the firm to market the product or service in a particular location). The franchisee pays a certain sum of money for the right to market this product” (Rubin, 1978, p.224). The franchising is more prevalent in the restaurant industry (Hoffman & Preble, 2003). The two distinct features of this business type include; first, in order to notable service components should

Franchising is a business model that allows companies to rapidly expand their market share. According to Franchise.com (2015), there are three types of franchises: distributorships, trademark licensing, and business format franchises. When two organizations enter into a distributorship, the originating company provides the rights another company to sell their products. An example of a distributorship is when an auto manufacturing company grants rights to a dealership to sell their vehicles (Franchise.com, 2015). Trademark licensing is when one company allows another company to use their trademark (Franchise.com, 2015). The business format franchise authorizes franchisees to sell the parent company’s products and/or services as well as utilize their business model. This type of franchising is the most common and is the type needed to obtain to open a new Cold Stone Creamery.

When buying into the company you sign a contract to firstly “buy” into the company, and then you have to pay royalties and a certain percentage of your earnings back to the head company. A positive of franchise agreements is that it allows companies to enter into the foreign market place with out having to put too much money into it. For example, 7- elevens in Australia are all franchises, the fist few franchises in Australia would have been set up as an experiment to see whether the Australian public would embrace the new chain store. The feedback would have been that Australia was pro 7-eleven and now you can walk through the city without seeing one on every corner. Another positive of selling your company as a franchise is that you can earn royalties. Different franchises have different royalty schemes, many expect you to pay a certain fee for the “name” each year and then pay them a percentage of the earnings. 7-eleven was taking 51 cents of every dollar made. This allows the head office to make money on the side while not having to invest more money into a situation where it could

Franchising is simply a method for expanding a business and distributing goods and distributing goods and services through a licensing relationship. In franchising, franchisors not only specify the products and services that will be offered by the franchisees, but also provide them with an operating system, brand and support. (Franchise.org, 2016)

Franchisor give all the right to the other members of franchise that they can sell or supply there product but they need to follow some rules and regulations. For example mc Donald like the packaging of burgers will be same no one can put any change in it.

Manufacturing and retail -In this sort of franchise the franchisee will generally occupy retail premises and sell products or services. The business depends totally on the location of the premises, with sales coming from walk-in consumers. In this situation, the franchisee will sell a product or service to end users. Operate from locations with high traffic like shopping malls. Depend on walk-in customers for sales.

* You can use a recognised brand name and trade marks. You benefit from any advertising or promotion by the owner of the franchise - the 'franchisor '.

A franchise is a right granted to an individual or group to market a company 's goods or services within a certain territory or location. Some examples of today 's popular franchises are McDonald 's, Subway, Domino 's Pizza, and the UPS Store. There are many different types of franchises. Many people associate only fast food businesses with franchising. In fact, there are over 120 different types of franchise businesses available today, including automotive, cleaning & maintenance, health & fitness, financial services, and pet-related franchises. The franchisee must follow certain rules and guidelines already established by the franchisor, and in most cases the franchisee must pay an ongoing franchise royalty fee, as well as an up-front, one-time franchise fee to the franchisor. Franchising has become one of the most popular ways of doing business in today 's marketplace. In most states you cannot drive three blocks without seeing a nationally recognized franchise company.

It is also prudent to consider that the franchise fee can be indicative of the level of trust. The amount of trust a franchisor hold with their franchisees can, at times, mitigate overall costs involved, lowering the risk for prospective franchisees (Herz, Hutzinger, Seferagic, & Winsperger, 2016). To illustrate this, the initial franchise fee is lowered for existing franchisees and those seeking a successive contractual term. Furthermore, an excess of trust is shown on behalf of the SHOPPE COMPANY, as one would imagine the initial fee ($10,000) would outsize the secondary ($20,000) to lower the risk of delinquent payments and ensure the commitment of the applicant.

Nowadays, franchising is one of the easiest ways to start a business. Franchising is defined as a long-term, continuing business relationship wherein for consideration, the franchisor grants to the franchise a licensed right, subject to agreed requirements and restrictions, to condusct business utilising the trade and/or service marks of the franchisor and also provides to the franchisee advice and assistance in organising, merchandising, and managing the business conducted to the licensee 1. The company granting these rights in deemed the franchisor, the receiver of these rights the franchisee, and the right is defined as the franchise. The franchiser owns a trademark or brand, which he (or she) agrees to allow the franchisee to use for a fee (often an original purchase price plus a percentage of sales). The franchiser provides the franchisee with assistance (financial, choice of site, and so on) in setting up their operation, and then maintains continuing control over various aspects of the franchisee 's business; for example, via the supply of products, discussion of their marketing plans and/or centralized staff training 2.