What is a franchise.

By: Espresso Vend Australia Franchise  26-Jul-2011
Keywords: Home Based Business, Franchise Business, Franchise for Sale

Franchising is a way of doing business. It is a method and marketing tool for companies to expand their market share more rapidly. It is more economical too.

There are three basic types of franchises:

  1. Distributorships, which grant the right to sell their parent company's products, such as auto dealerships (Toyota, Ford, GM, Mercedes, etc).
  2. Trademark or brand name licensing, which gives the licensees the right to use the parent company's trademark and brand in conjunction with the operation of their own business such as beverages (Coca Cola, Pepsi).
  3. Business format franchises, the type most people are familiar with (Subway, Muffin Break, Ultra-Tune) are the focus of this article.

Business format franchisors offer to their franchisees the license and rights to sell its goods or services and use its business techniques. The franchisees usually pay an initial fee (franchise or license fee) to acquire this right, and thereafter pay a percentage of their gross sales (royalty)  to the franchisor throughout the term of their franchise contract.

In return for these payments, franchisees gain privileges, including the right to sell a proven and recognized product or service, to use the franchisor's business practices, and to receive initial training and ongoing support. Additional responsibilities usually include:

  1. Requirements to meet a variety of quality controls for products and services sold.
  2. Restrictions on what they can sell or how they can operate using the company's name.
  3. Specifications for their business location and site appearance.
  4. Prohibitions on the operation of any similar businesses during or after the term of the franchise agreement.

Franchisees usually have an advantage over their non-franchisee competitors, since they have the rights to use the franchisors:

  1. Brand names, trademarks, copyrights, trade secrets, and patents.
  2. Uniform logos, storefronts, purchasing power and interiors.
By following the franchisor's business practices and offering products that meet the company's standards, franchisees can consistently provide customers with quality goods and services

Keywords: Coffee Business, Coffee Business for Sale, Coffee Franchise, Coffee Vending Business, Coffee Vending Franchise, Franchise Business, Franchise for Sale, Home Based Business, Mobile Business for Sale, Mobile Franchise,

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