What Is Franchising?

So basically the advantage of the franchisor is that franchising is an alternative way of building "chain stores" in order to distribute goods that avoid the investments and liability of a chain. The franchiser will succeed if the franchisees

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.

Franchising acquired its popularity by establishing a common method of service which gave customers the comfort that they look for when they look for a meal.When the customers go out

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)

Franchising is a well-known business and commerce procedure that brings together the title-holder of recognized merchandise with another business or products. This system is readily used by small businesses and companies to provide as a mean to provide authentication and support for their business by having a brand name of a well-known company associated with it. However like most business entry strategies franchising to has some

Franchisors are increasingly having to be more and more selective in the adoption of franchisees with factors such as economic climate and the potential difficulty with growth playing key factors in the decision making process. It is not simply an ability to grow which creates a successful Franchise and nor is it the desire of any franchisor to adopt every potential franchisee. Franchisors are becoming more and more scrutinising as the global economy declines. There is a general understanding within any franchised

Franchising refers to the franchisors in a form of contract that allows franchisees to be compensation for the use of its name, trademarks, and proprietary technology, product and operation management, in other business activities and business models. (Siebert, 2004)

The purpose of this paper is to shed some light on the concept of franchising from the viewpoint of the franchisor, discuss its different uses taking into account the advantages and disadvantages attached to them, and link these considerations to a firm’s internationalization decision-making process.

"Franchising is the wave of the future," according to the U.S. Department of Commerce. John Naisbitt writes in Megatrends that "Franchising is the single most successful marketing concept ever." Nowadays, McDonald’s Corporation has 36,368 restaurants around the world. McDonald’s has established its success based on a widespread practise in capitalistic societies, known as franchising. Many entrepreneurs (the franchisees) have chosen to acquire a franchise to access the knowledge, the trademark, and the processes of a corporation (the franchisor); in order to sell a product, or provide a service under the business’ name. In return, depending on the franchise contract, the franchisee usually pays additional money for the start-up of his company, and annual licensing fees. Franchises are extremely popular among entrepreneurs who wish to operate in highly competitive industries, such as fast-food industry. In fact, franchises’ biggest advantage is trademarks. Through franchising, entrepreneurs gain access to an established company’s brand name, already known by the customers. Also, the franchisor often provides assistance before and during the life of the franchise. Of course, success is not guaranteed, and work and talent have to be invested to attain profits. Many americans have achieved wealthiness through franchising. Thus, despite the fact that some entrepreneurs who attempted this endeavor have not been so fortunate, and eventually declared bankruptcy, I strongly believe

According to Hill, Jones, and Schilling (2015), franchising is a strategy in which the franchisor or the founding company grants the franchisees, the purchasing company, the right to use the franchisor’s name, reputation, and business model in return for a franchise fee and often a percentage fee and often a percentage of the profit. The business must operate under strict guidelines, follow the rules, regulations, and standards given by the founding franchisors (Hill, et al 2015, p. 182). This creates a business relationship between the two. According to Ribeiro, D., & Akehurst, G. P. (2014) franchising has become a major driver of business development and franchisor brand equity is a critical factor with a clear impact on the perception and behavior of the franchise. Franchises brings together independent companies and establish agreements between two parties.

Franchising is a long-term cooperative relationship between two entities – a Franchisor and a Franchisee, (NZNC, 2015) they both work on a

Franchising is a business strategy for getting and keeping customers. It is a marketing system for creating an image in the minds of current and future customers about how the company 's products and services can help them. It is a method for distributing products and services that satisfy customer needs. Franchising is a network of interdependent business relationships that allows a number of people to share and experience the brand. It is a successful way of promoting brand identification.

Over the years, franchising has become very important to the economy. When franchising is done

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.

In the business world there are many routes businesses can take to try to ensure a successful venture. There are sole proprietorships, partnerships, limited liability partnerships, corporations, limited liability corporations, S corporations, and then there is franchising. A formal definition of franchising is “a continuing relationship in which a franchisor provides a licensed privilege to the franchisee to do business and offers assistance in organizing, training, merchandising, marketing and managing in return for a monetary consideration” (Franchising, n.d.). In simpler terms, franchising is paying someone for their business, marketing, and operations strategy, as well as the use of their name (Obringer, n.d.). Discussed next are the important roles in franchising.