Business franchise

First of all, we need to briefly talk about the very concept of franchising. Simply put, this "Lease" of a trademark. Business franchise is regulated by a special agreement between the franchisor (whoever doesgranting a franchise) and franchisee (to those who receive a franchise). The latter pay contributions to the franchisor for the right to be part of one system. The most striking example of franchising is the worldwide chain of McDonald's restaurants, but the corporation owns only 15% of restaurants in the world, with the remainder being the distributors.

It should be noted that franchise business has a lot of advantages. Franchising implies the use of a proven business system. It is also worth noting that the development of the network itself is an excellent advertising brand, which does not require additional financial investments.

Franchisees always retain their legal and economic independence, despite the fact that the franchisor has a certain degree of control aimed at improving the efficiency of the partners.

Also it should be said that The franchisor does not leave partners alone with the problems that have arisen, which can arise at the initial stage of business. In addition, organizations that provide franchises, necessarily warn partners of the possible risks, as well as ways to reduce them.

It is worth emphasizing the possibility of a fairly successful entry into the market through franchise business. The fact is that even before the start of work under a well-known brand, you can safely rely on a certain number of loyal consumers.

Franchisees get access to the knowledge base of the franchisor. Another positive aspect is thelow advertising costs. The fact is that usually franchisees start their activities as part of a well-known network, so at first there will be enough advertising on the local market. Franchisers always try to provide their partners with a regular supply of the necessary products and raw materials.

Also it is necessary to say that the franchise business has a number of shortcomings. First of all, partners must follow certain rules and restrictions, even in cases where it does not bringmaximum benefit to the business. Suppliers can only be those organizations that are appointed by the franchisor, and this leads to the fact that raw materials are very often purchased at inflated prices.

In addition, for franchisees can be installed Strict restrictions on getting out of business, for example, it may be forbidden to opencompeting organizations in a certain territory for a certain period of time. Still sometimes there are situations when the owners of franchises decide to close their network. In this case, you will be able to engage in business only until the end of the term specified in the contract, and then you will have to think about starting a new business.

To date, franchise business is considered to beone of the most common. Entrepreneurs become part of networks, as consumers trust such companies. The reason is the guarantee of product quality and the provision of services. Besides, large companies value their reputation very much. Modern business franchise includes a network of restaurants, cafes, shops, software support and much more.