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What is Franchising

Written by: Bob Richman

Article Overview: In its most simple definition, a Franchise is a business opportunity that allows the Franchisee (possibly you) to start your business by legally using someone else's (the Franchisor's) expertise, ideas, and processes. In some cases, this means also having the right to use the Franchisor's established name and branding, as well as their already-tested business model. In other cases, this means the right to resell (or distribute) a Franchisor's product.

What is Franchising

So you're looking for a Franchise opportunity...but you're not quite sure exactly what "Franchise opportunity" means? What is a Franchise, anyway?

In its most simple definition, a Franchise is a business opportunity that allows the Franchisee (possibly you) to start your business by legally using someone else's (the Franchisor's) expertise, ideas, and processes. In some cases, this means also having the right to use the Franchisor's established name and branding, as well as their already-tested business model. In other cases, this means the right to resell (or distribute) a Franchisor's product.

More completely, a Franchise is the right to use someone else's business system. As a Franchisee, you purchase this right by means of a Franchise fee and in accordance with a contract, called a Franchise Agreement. In return, the Franchisor maintains the business process and you agree to operate your business according to their model.

When you hear the term "Franchise", the most familiar example is fast food-such as Wendy's, McDonald's, or Burger King. The important thing to note is that these Franchisors are not just selling burgers; they're selling a consistent way to run a business that sells burgers. This includes marketing, advertising, recipes, the look and feel of the facility from which you, too, would sell burgers, and the very well-known branding that goes with that system.

Fast food and restaurants are not the only examples of Franchises, though their success is probably what brings them first to mind. Just about every industry you can think of includes a successful business practice sold as a Franchise-from janitorial services to tires to haircuts. There are as many different Franchise business systems as there are goods or services that people wish to use. Franchises -- they aren't just chicken or burgers anymore.

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Article Tags: burger king, burgers, business model, business practice, business process, business system, business systems, fast food, franchise agreement, franchise business, franchise fee, franchise opportunity, franchisee, franchises, franchisor, franchisors, haircuts, janitorial services, marketing advertising, successful business



Related Forum Posts
Re: Re Franchise etc - [quote="bmueller47":e0j0nu4t]Can you see a shift of various types of franchises? What I am thinking about is that today it is more difficult to create franchises, that has great appeal. More and more people want to have their business, but no interference of someone else.[/quote:e0j0nu4t] Not sure what you mean exactly but it is certain that more and more people want to have their own business but not more and more people know what they really want to do, or how to do it. And that's what franchising is all about. Franchising is not for an entrepreneur. An entrepreneur will do his own thing. People who buy franchises want a turn key business, with a proven model. Franchising in the US had never been that good. I don't have the exact numbers in mind but I know for sure that franchising is growing more and more as people are getting more and more aware of this business model.
Franchising vs. Licensing? - What is your opinion on Franchising vs. Licensing? Which is better?
Nominations for a new Franchising Moderator! - Is there anyone you'd like to nominate as our Franchising Moderator (or volunteers for the position)?
Great Article, chock full of info. - Ian, Thank you for linking your article regarding Licensing vs Franchising. Its a good read.
Re: Hello from Captain Franchise - Hi BuzzAroundBooks, I actually found the site in my search for franchise networking. We're looking to make connections and also inform the general public about franchising. Franchising is often misunderstood because of the lack of knowledge. We're here to help and learn as well! Thanks!


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