franchising

(verb)

Franchising is the practice of using another firm's successful business model.

Related Terms

Examples of franchising in the following topics:

  • Types of Franchises

    • On this basis, there are three different types of franchise:
    • In most cases, the franchisee also buys supplies from the franchiser.
    • Fast food restaurants are good examples of this type of franchise.
    • 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.

  • Franchise Agreements

    • Prior to a franchisee signing a contract, the US Federal Trade Commission regulates information disclosures under the authority of The Franchise Rule .The Franchise Rule requires that a franchisee be supplied a Uniform Franchise Offering Circular (UFOC ) or Franchise Disclosure Document (FDD ) prior to signing a franchise agreement, a minimum of ten days before signing a franchise agreement.
    • Each state has unique laws regarding franchise agreements.
    • The content of a franchise agreement can vary depending on the franchise system, the state jurisdiction of the franchisor, franchisee, and arbitrator.
    • Uniform Franchise Offering Circular (UFOC) or FDD Franchise Disclosure Document (FDD)
    • Franchising agreements contain many legal documents that must be understood and filled out.

  • Franchising

    • In franchising, an organization (the franchiser) has the option to grant an entrepreneur or local company (the franchisee) access to its brand, trademarks, and products.
    • Franchising is a particularly useful practice when approaching international markets.
    • Franchising has some weaknesses as well, from a strategic point of view.
    • Most importantly, organizations (the franchisers) lose a great deal of control.
    • While the risk of franchising is much lower in terms of capital investment, so too is the returns derived from operations (depending on the franchising agreement in place).

  • Trends in Franchises: Growth

    • From 2001 to 2005, the franchising sector grew at a faster pace than many other sectors of the U.S. economy .
    • Payroll generated by franchised businesses grew 21.6% compared to 15.4% for all businesses.
    • The International Franchise Association reported that 2012 would be the year that franchising rebounds.
    • The economic outlook published for 2012 projects an increase of 1.9% in franchise establishments.
    • Franchising is the practice of using another firm's successful business model.

  • Working from Home or Online

    • Home franchise operations have made franchising more accessible and affordable than ever, but still require knowledge and expertise.
    • One important factor leading to the record number of franchises in recent years is the proliferation of home based franchise opportunities.
    • This has made franchising accessible to a wider group of people.
    • Because of enormous charges in traditional franchise companies, very few people meet the expense needed to become franchise owners.
    • In considering franchises, you should see if you are well-suited to particular franchise options by determining your areas of expertise.

  • Trends in Franchises: International Adoptions

    • Let's take a quick look at the benefits of global franchising, and where the potential pitfalls are:
    • For the franchiser (i.e. the parent company), franchising allows rapid expansion with less risk and required capital (as some of this risk is assumed by franchisee, along with funding).
    • A franchising model can provide both.
    • The franchiser is outsourcing some amount of control and returns on investment to the franchisee.
    • Convenience stores that franchise, such as 7-Eleven, operate quite similarly.

  • Advantages of Franchises

    • A franchise agreement can have many benefits for both the franchisor and the franchisee.
    • Buying a franchise business provides a higher chance for success.
    • - A franchise gives more security from the beginning.
    • When you purchase a franchise, all the necessary groundwork has been done already.
    • - The new franchise owner gains many benefits from the association with the main franchise company.

  • Disadvantages of Franchises

    • A franchise agreement can also have disadvantages for both the franchisor and the franchisee.
    • - High entry and ongoing cost: It can be more expensive to start a franchise than an independent business.
    • You can open your own burger bar for the fraction of the cost of buying the rights to a McDonald's franchise.
    • Thus, franchising is often an option open only to already wealthy businessmen.
    • Royalties are paid periodically during the life of the franchise agreement.

  • Technology in Franchises

    • Here's what he has to say about technology and franchises:
    • In the first quarter of 2010, Saladworks released three new technological advances for the franchise and its customers.
    • The franchise does use other phone providers based on specific coverage needs and the desires of the local franchisee.
    • Question from Top New Franchises: What role does technology play in your organization?
    • Give examples of how franchises are using technology to improve business performance

  • Licensing

    • Franchising represents a very popular type of licensing arrangement for many consumer products firms.
    • Holiday Inn, Hertz Car Rental, and McDonald's have all expanded into foreign markets through franchising.