Getting To The Point – Businesses

What Is Franchising and its Benefits Franchising is simply defined as the method of doing business where the licensed trademarks, systems and methods of doing business is being done by a franchisor from the franchisee in exchange for a royalty fee or a franchise management fee. Franchising is another form of business by which a product, service or method of a franchisor is being obtained by a franchisee. In this venture, the franchisee will be given support and assistance by the franchisor in the organization, training, merchandising, marketing and direction in return for an agreed consideration. In franchising, there is usually a contractual agreement between the franchisor who is a wholesaler or manufacturer or a service sponsor, and a retail franchisee where it is allowed to conduct the specific kind of business, under an established name and the same pattern of business.
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Franchising is today’s most popular and fastest growing business economic model. Sharing of brand identification is allowed in this type of business relationship among people, and has been a proven way of doing business and being successful in marketing and distribution system. Usually, when people think of a franchise, they immediately think of the fast food business. But today, franchising is going beyond the burger and fried chicken shops. Today, the concept of franchising has expanded to more than 70 different kinds of businesses that include auto repair shops, children’s art centres, fitness clubs, law and consulting firms, and other home based ventures. It is now claimed that the franchising model has become a big economic engine in the world, and it is a model that is giving an increased opportunities for firms and individual businessmen alike.
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Franchising has its various advantages. One advantage is that franchising is already a proven business to invest in. The next to mention about the advantages of franchising are its key attractions such as faster start up, development of customer base is also faster, and profitability is quicker to experience. Another positive thing about a franchise is that there is already a known proven formula that is quantifiable. Another advantage of franchising is that there is an owner transition and training as well as a full control of a direction with strategies, plus with the ability to review thoroughly the past records and history of the company. Considered as the biggest advantage of franchising is the reduced amount of risk an entrepreneur take for his or her investment. Because the franchise company can buy goods and supplies in bulk, you will be getting good deals in these areas, and you get the savings from this arrangement as well as the other franchise members. And lastly, but definitely not the least advantage in franchising, the customers of the franchised product or service are dealing with the known rather than the unknown, and this makes customer patronize the franchise.