Franchise

Franchise is a business model that combines the best aspects of the corporate world and the independent business owner. The best description would be to describe it as a model that fills the gap between working for somebody else and working as an independent business owner.

Franchising is a business method that can be applied in almost any industry. There  are numerous  brands established throughout the world in diverse business lines.

Franchising has two dominant forms. In product and trade name, a franchisor retains the rights over the name or trademark and enters an agreement to license the use of that name or trademark.

The business format is a more complex business arrangement in which the franchisee is supported with a range of products and services by the franchisor. Franchisees enter an agreement with the franchisor to conduct their business under procedures that developed by the franchisor.

The International Franchise Association states that:-

"Franchising is a method of distributing products or services. At least two levels of people are involved in a franchise system:

1. the franchisor, who lends his trademark or trade name and a business system,
2. the franchisee, which pays a royalty and often an initial fee for the right to do business under the franchisor's name and system."

Legally, franchisees enter a licensing agreement to operate the business but do not own the Franchise. Franchisees own the assets established in their business and have legal rights under state and federal regulations. Clarification of these regulations should be undertaken prior to any commitment being entered.

Purchasng a such a business is an opportunity for an individual to secure their future. It is possible to make money faster rather than forming a business from start-up. Investing in a franchising business has the potential for profitable long-term return on the investment. Fees vary and may include a percentage of monthly gross sales and contributions to the company-wide advertising and marketing fund. Fees can range from only a few thousand dollars to many of thousands of dollars.

Much of what prospective franchisees are seeking when they buy into a Franchise brand name is peace of mind coupled with some certainty of income. They see an opportunity to make reasonable money while creating a lucrative business is better than if they starting a business from scratch.