What is franchising?

Vladimir Kulinich
Vladimir Kulinich
March 27, 2013
What is franchising?

Many have heard such a word as "franchising." That is franchising, our article will tell.

Franchising is a form of relationship between individuals and / or firms, in which the party number 1, called the "franchisor" and has developed a system for developing a business, corporate identity, well-known trademark, know-how, production and / or trade secrets, experience , knowledge, reputation and other intangible assets, allows the party number 2, called the "franchisee", to use all of the above on certain conditions.

Also, franchising is a method of organizing a business. In it, the company-owner (that is, the franchisor) transfers the company or businessman (that is, the franchisee) the exclusive right to sell the services and goods of this company in exchange for the obligation of the company or businessman to sell these services and products:

  • using negotiated technologies;
  • subject to specific quality characteristics;
  • according to a specific scheme;
  • under the negotiated trademark;
  • in a pre-determined location

One of the key concepts in such a relationship system is a franchise or franchise package. This is considered to be a complete business system, including software, manuals, documentation and other materials, which side 1 transfers to side 2. The presence of such a franchise allows side number 2 to work effectively, even if it does not have prior experience and knowledge in a particular area of ​​business. Now you know what franchising is!

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