A franchise is a method of distributing goods and services by licensing a business idea or concept to another. The “Franchisor” is the legal owner of the franchised business concept and ideas, including names and logos. The “franchisee” is the individual or entity that purchases the right to use these concepts and ideas from the “Franchisor”. A “franchise Agreement” grants to the “Franchisee” a limited license and right to use and operate a recognizable outlet within a defined “Territory”, by utilizing a pre-existing business system and proprietary marks. The franchise agreement allows the franchisor to carefully control the obligations and responsibilities of the franchisee.
Studies reveal that franchise businesses experience lower default rates than independent businesses and generally have a somewhat easier time securing financing because the Franchisor typically has an established trademark and goodwill, as well as marketplace experience. Although franchises usually require upfront fees and are heavily regulated by Federal and State agencies because of their inherent risks, a Franchisee operating under one trademark can achieve levels of brand awareness, market penetration and purchasing power that business people operating individually could not ordinarily achieve.
Franchisor wants to control the content and nature of any advertising conducted by the Franchisee.
The franchisor may provide specific advertising materials and/or require the franchisee to receive franchisor approval and comply with strict advertising guidelines. Franchisor also wants to control the frequency of advertising and will require, based on costs in a given market, specific advertising spending budgets for each franchisee.
Confidential Information :
In addition to the operating manual, the franchisee will be exposed to various proprietary information related to the operation of the franchise that the franchisor will want to remain confidential. As such, the franchisee expressly warrants that they will not divulge any information related to the franchise or franchisor’s business.
Franchise is a growing business these days irrespective of its domain If you want to start your business, you can select a franchise. Franchises are easier to start as they have an already established brand name. If you start your own venture, you have to start from the scratch; while a city based franchise is just like a readymade business available to you. There are plenty of options to choose from. Different franchises offer various types of schemes and benefits to their investors. If you are still confused about which one to pick, consider We Simplify the List of Franchise in our website.