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What is
franchising?
Franchising is the opportunity for an individual to own his
or her own business, even if he or she is inexperienced
and/or lacks adequate capital. During recent years,
franchising, as a type of business operations, has been
expanding rapidly and entering into new areas of
application. The most recent industry study estimates that
franchised businesses accounted for $803 billion in annual
sales in 1992.
Franchising is a form of licensing by which the owner (the
franchisor) of a product, service or method obtains
distribution through affiliated dealers (the franchisees).
The holder of the right is often given access to a
geographical area.
The product, method or service being marketed is identified
by a brand name, and the franchisor maintains control over
the marketing methods employed, or assists the franchisee in
the operation of the business.
In many cases, the operation resembles that of a large chain
with trademarks, uniform symbols, equipment, storefronts and
standardized services or products. The franchisor maintains
uniform practices as outlined in the franchise agreement. |
