Franchising is a commercial collaboration agreement between two legally and economically independent entrepreneursserviceminder.
The parts of the franchise
On the one hand the Franchisor (commonly called Franchisor or Parent Company) and on the other the franchisee (also called Affiliate) who, through the stipulation of the franchise agreement, put in place a direct collaboration for the marketing of goods and / or services with the same elements. distinctive and with the procedures tested by the Franchisorsoftware for franchisor.
Before developing his franchise, the Franchisor experimented with his marketing formula in the market, achieving successes and consolidating a brand that he further strengthened through the franchising system.
In this way you get to share with your affiliate all that wealth of experience on the way of working also known as know-how. That is, a wealth of knowledge is transferred to the franchisee through training and manuals reserved for this.
In this way, the potential affiliate opens a business with a company that already knows how to move to successfully enter the market.
The franchising formula is often chosen by those who have never worked on their own and have no experience on the activity they will undertake
The standardization of the franchising system was born precisely for this reason.
What does franchising mean
The term franchise derives not from an English word . It is a “franchise”, which can be translated as franchise or privilege.
As mentioned, the franchise agreement must be more correctly called commercial affiliation and consists of the contract by which a company grants the right to market its products or services using its name or brand to another company, against the payment of a fee.
Franchising: fees and royalties
When the potential franchisee joins a franchise chain, he is usually asked by the franchisor for an entry fee called an entry fee.