Types of Franchising

3579 Words15 Pages
Types of Franchising There are three basic types of franchise; 1. Trade name franchise Trade name franchise involves a brand name such as True Value Hardware or Western Auto. Here, the franchisee purchases the right to become identified with the franchisers trade name without distributing particular products exclusively under the manufacturers name. 2. Product distribution franchise A Product distribution franchise licenses the franchisee to sell specific products under the manufacturers brand name and trademark through a selective, limited distribution network. This system is commonly used to market automobiles (Chevrolet, Oldsmobile, Chrysler) gasoline products (Exxon, Sunoco, Texaco), soft drinks (Pepsi Cola,…show more content…
With this in mind, let us investigate the specific advantages of franchising to the franchisee. The Advantages of a Franchise 1. Management Training and Support. The most common cause of business failure is incompetent management. Franchisers are well aware of this, and in an attempt to reduce the number of franchise casualties, they offer managerial training programs to franchisees before opening a new outlet. Many franchisers, especially the well established ones, also provide follow-up training and counseling services. This service is vital, especially because most franchisers do not require a franchisee to have experience in the business. Training programs vary in their degree of formality and comprehensiveness. Some franchisers rely almost exclusively on manuals and booklets, with very little personal interaction or instruction. Other franchisers provide extensive programs at a company location, using classroom training, discussion groups, simulations, and other techniques to familiarize the franchisee with the basic operation of the business. The range of topics covered in training programs is quite varied. Standard subjects include store layout and design, equipment purchasing and operation, insurance needs, inventory control,
Open Document