The opposite is also true.įranchising Is also a Contractual Relationship

Since customers see franchise systems as a branded chain of operations, great products and services delivered by one franchisee benefits the entire system. This is important to you as enforcement of brand standards by the franchisor is meant to protect franchisees from the possible bad acts of other franchisees that share the brand with them. You want to select a franchisor that routinely and effectively enforces system standards. Initial and continuing marketing and advertising.

Research and development of new products and services,.

Training for you and your management team,.

Site selection and site development assistance,.

Some of the more common services that franchisors provide to franchisees include: When selecting a franchise system to invest in, you want to evaluate the types of support you will be provided and how well the franchisor is managing the evolution of the products and services so that it keeps up with changing consumer expectations. And, franchisors and all of the other franchisees expect that you will independently manage the day-to-day operation of your businesses so that you will enhance the reputation of the company in your market area. Great franchisors provide systems, tools and support so that their franchisees have the ability to live up to the system’s brand standards and ensure customer satisfaction. But first and foremost, they have trust in the brand to meet their expectations, and the franchisor and the other franchisees in the system rely upon you to meet those expectations. If you become a franchisee, you will certainly be developing a relationship with your customers to maintain their loyalty, and most certainly customers will choose to purchase from you because of the quality of your services and the personal relationship you establish with them. To a certain extent consumers really don’t care who owns the business so long as their brand expectations are met. At its core, franchising is about the franchisor’s brand value, how the franchisor supports its franchisees, how the franchisee meets its obligations to deliver the products and services to the system’s brand standards and most importantly – franchising is about the relationship that the franchisor has with its franchisees.Ī franchisor’s brand is its most valuable asset and consumers decide which business to shop at and how often to frequent that business based on what they know, or think they know, about the brand. While the law is certainly important, it is not the central thing to understand about franchising. Many people, when they think of franchising, focus first on the law. Examples of traditional or product distribution franchising can be found in the bottling, gasoline, automotive and other manufacturing industries. While less identified with franchising, traditional or product distribution franchising is larger in total sales than business format franchising. The franchisee generally receives site selection and development support, operating manuals, training, brand standards, quality control, a marketing strategy and business advisory support from the franchisor. In a business format franchise, the franchisor provides to the franchisee not just its trade name, products and services, but an entire system for operating the business. Business Format Franchising is the type most identifiable. There are two different types of franchising relationships. The practice of creating and distributing the brand and franchise system is most often referred to as franchising. Technically, the contract binding the two parties is the “franchise,” but that term more commonly refers to the actual business that the franchisee operates. A franchise (or franchising) is a method of distributing products or services involving a franchisor, who establishes the brand’s trademark or trade name and a business system, and a franchisee, who pays a royalty and often an initial fee for the right to do business under the franchisor's name and system.

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