Looking On The Bright Side of Sales

Get to Know What Franchising Means When a business gives permission to another business to operate in its products is what we call franchising. Leasing or renting for a business opportunity is what entails franchising. The Mother Company is now referred to as the franchisor while the business that gets the permission to operate is called the franchise. The franchisee is required to pay to the franchisor some money to be allowed to operate. There are financial commitments that the franchisee must fulfill to be given the green light to operate. Trademark’s royalty, the cost of training and advisory services and a percentage of each unit sold are the three financial commitments that the franchisee must meet to be allowed to operate by the franchisor. The success of the franchisor depends on the success of the franchise. The operation of the franchisee is limited. However the franchise agreement could be renewed every time it expires. The agreed location is where the franchise is supposed to operate. The role of protecting the trademark belongs to the franchisor while the obligation of carrying out the services that the trademark entails belongs to the franchise.
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Two types of franchises exist- the single franchise and the multi-franchise. Single franchisee operates only one unit while a multi-franchisee operates more than one unit.
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The number of units to the franchise, the time frame for each unit and the area for each unit to operate from must be agreed. A unique agreement for each unit of the franchise is set. Multi-franchises are in high number nowadays due to their popularity. Over the many years that the multi-franchises have been in existence they have gained popularity. High levels of investments are required to set up multi-franchises. Multi-franchises have high levels of stability which is their major advantage. The level of success of the multi-franchises is very high. Single franchises may not be as successful as the multi-franchises. A single franchise might be disadvantaged since it operates from one location. The success of multi-franchises lies in their popularity. When the franchisors realizes there is huge potential in multi-franchises they encourage the multi-franchises to open more and more units than before. The other advantage with the multi-franchise is that when one unit seems not to be doing great, the other units may come in and help to revive them. The viability of multi-franchises relies on good research. For the multi-franchise to thrive it is advisable to have ready cash and other forms of investments.