Talk:Franchise
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I've merged Franchise agreement into Franchising, but kept the note about government franchising on the Franchise page. — Jlin 04:28, 18 Apr 2005 (UTC)
Franchising and Franchise agreement are about the same thing, but there's only the disambig note here about government franchising. Someone who knows more about the subject should clean these three up some. — OwenBlacker 23:41, Nov 11, 2004 (UTC)
I'm removing {{expansion}} because that's a disambiguation page anyway :?--Chealer 07:41, 2004 Nov 20 (UTC)
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[edit] Political franchise
Is there a good rule of thumb to determine if a link about political franchise should more rightly point to suffrage or citizenship? I know political franchise redirects to sufferage, but in some contexts, would citizenship make more sense? D-Rock (Yell at D-Rock) 02:26, 23 December 2005 (UTC)
[edit] Cable franchise?
What kind of a franchise is a Cable franchise? As in 1984 Cable Franchise Policy and Communications Act. Is it a monopoly (as in "the local telephone monopoly")? A utility? No one talks about "the local water franchise" or "electricity franchise". (Do they?) Ewlyahoocom 22:56, 15 February 2006 (UTC)
[edit] Franchise
Franchise means right or privalage if there is a problem all the blame is put on store owner it makes all money from products and NOTHING else it pays 1.5% of taxes they pay for none of the products up front they always get bumped out of money
[edit] Meaning and Types of Franchise
The primary trade association for franchising issues, the International Franchise Association, defines franchising as "continuing relationship in which the franchiser provides a licensed privilege to do business, plus assistance in organizing, training, merchandising, and management" in exchange for fees and royalties from the franchisee.
In other words, franchising is the process of expanding a business whereby a company (franchisor) grants a license to an independent business owner (franchisee) to sell its products or render its services.
A franchise, therefore, is a legal agreement permitting a business to furnish a product, name, trademark, or idea to an independent business owner. Each party of a franchise agreement gives up some legal rights to gain others. The franchisor increases its number of outlets and gains additional income. The franchisee opens an established business with strong potential for success.
Franchising offers people a chance to own, manage, and direct their own business without having to take all the associated risks. This aspect has allowed many people to open businesses of their own who might never have done so otherwise.
TYPES OF FRANCHISES
There are four major types of franchises: – Business format franchises, – Product franchises, – Manufacturing franchises, – Business opportunity ventures,
Business format franchises, the most common type, a company expands by supplying independent business owners with an established business, including its name and trademark. The franchiser company generally assists the independent owners considerably in launching and running their businesses. In return, the business owners pay fees and royalties. The franchisee also often buys supplies from the franchiser. Fast food restaurants are good examples of this type of franchise.
With product franchises, manufactures control how retail stores distribute their products. Through this kind of agreement, manufacturers allow retailers to distribute their products and to use their names and trademarks. To obtain these rights, store owners must pay fees or buy a minimum amount of products. Tire stores, for example, operate under this kind of franchise agreement.
Through manufacturing franchises, a franchiser grants a manufacturer the right to produce and sell goods using its name and trademark. This type of franchise is common among food and beverage companies. For example, soft drink bottlers often obtain franchise rights from soft drink companies to produce, bottle, and distribute soft drinks. The major soft drink companies also sell the supplies to the regional manufacturing franchises.
THE ADVANTAGES OF FRANCHISING
Franchisers benefit from these agreements because they allow companies to expand much more quickly than they could otherwise. A lack of funds and workers can cause a company to grow slowly. However, through franchising a company invests very little capital or labor, because the franchisee supplies both.
A company also can ensure it has competent and highly motivated owner/managers at each outlet through franchising. Since the owners are largely responsible for the success of their outlets, they will put a strong, constant effort to make sure their businesses run smoothly and prosper. In addition, companies are able to provide franchising rights to only qualified people.
THE DISADVANTAGES OF FRANCHISING
In return for the benefits franchisees receive, they must pay fees and royalties to the franchisers. The franchise fee may range anywhere from $5,000 to over $1 million and hence can be a major expenditure. Besides the franchise fee, franchisees often must pay royalties periodically during the life of the franchise agreement. Royalty payments are either a percentage of an outlet's gross income—usually under 10 percent of an outlet's gross income—or a fixed fee. Franchise costs vary to some extent because of costs associated with different kinds of businesses and with different locations. For example, a person who wishes to open a franchised employment service operation, such as Talent Force, based in Atlanta, Georgia, can get away with as little as a $7,500 fee, plus one year's starting capital investment of $50,000 to $110,000. On the other hand, start-up costs for a company like J.O.B.S., based in Clearwater, Florida, can be as little as $45,000, including a $30,000 franchise fee.
Written by Mahesh Gowda.. Mumbai ... India
