Tip 1: What is franchising
Tip 1: What is franchising
Franchising Is a business development method based on"Lease" of the trademark. In legal terms, franchising is a method of complex licensing, when together with a trademark (or commercial designation), the user is also presented with a license for a complex of know-how.
Instructions
1
In franchising relationships, twoparties: the franchisor is the one who provides the trademark for use, and the franchisee is the one who will use it (the license buyer). Franchisee, under the general rules for licensing intellectual property, pays the franchisor the agreed amount of money at a time, as well as - regularly - royalties, or royalties to the right holder for the use of a trademark or commercial designation.
2
However, there are two principal differencesfranchising from "ordinary" licensing of intellectual property. The first is that the franchisee is obliged to use the trademark in a manner strictly prescribed by the franchisor. Second - royalties are paid to the franchisor regardless of the results of the franchisee's activities. Consider these differences in more detail.
3
As a rule, the franchise scheme (franchise)is used to build the so-called "sales networks" of products produced under the trademark or commercial designation. In this scheme, the franchisor is the manufacturer of the product (most often), and the franchisee is the seller. The difference from the "usual" trade agreements is that the franchisor obliges the franchisee not only to sell the goods, but also to use the methods of advertising, marketing, reporting, etc. developed by him, that is, methods and methods, know-how, which constitute the so-called "business management system".
4
When working on a franchise license franchisee(seller), as a rule, undertakes to regularly purchase from the manufacturer (franchisor) certain volumes of the product for subsequent sale. At the same time, the franchisee has no right to set its own retail prices on the product - but only in the price range determined by the franchisor. As a rule, the franchisor determines in the agreement the norms of sales volume, and also - in the case when the franchisee overfulfills the standards - the system of bonuses. It should be noted that royalties - regular deductions to the franchisor - are not a "percentage of the intermediary", these are deductions for the use of intellectual property (in this case a complex of know-how).
Tip 2: Franchise - the opportunity to open your business under the auspices of a well-known brand
Franchising has become a part of our life. This is a unique opportunity to open your own business under the auspices of a well-known brand. What is franchising, and what features does it have?
Franchising is the transfer of use rightshis system of business processes to an outside person who decided to open a business for a franchise. Simply speaking, when buying a franchise, an entrepreneur becomes completely independent in terms of owning a company, gets a ready and honed business system, but he must agree and accept all the conditions and established processes of the company from which he buys the franchise. When buying a franchise, the business system is already established and includes:
- right to use the trademark;
- marketing system;
- duty, or recommendations for the use of certain commercial equipment;
- channel for the acquisition of goods;
- recommendations on the style of registration of offices, business ethics of personnel;
- the system of personnel training;
- distribution system of products.
An entrepreneur who has decided to buy a franchise already hascan not think about the idea of a business. He just needs to choose the direction, the company and purchase a franchise from her. An entrepreneur does not need to think about developing a business plan, calculating profitability, all this will tell him the franchisor. The franchisor will give the main recommendations and an approximate scheme of work, which will bring income. The only thing that is required at the very first stage from the entrepreneur is the financial investments that are needed to purchase the franchise.
Buying a franchise, an entrepreneur buys alreadyready business, customer loyalty to the chosen brand. It remains for him to coordinate all the work correctly. After all, to buy a business is only half way, it is important to keep the company "afloat" and monitor the quality of the service.
Tip 3: Franchising without investments: is it real?
Franchising is the use of a trademark andsuccessful successful business model of an already existing company. One of the main conditions of franchising is the subscription fee for the opportunity to do business and the initial contribution for using the franchise. However, it is worthwhile to understand that fragmentation without monetary investments exists.
