Franchising is an alliance between people who have specific responsibilities and relationships along with a common objective of dominating markets. Some of the examples of franchising are Dominos, McDonald’s, Subway, Pizza Hut, KFC, Baskin Robbins, Burger King, and others.
Functions of Franchising
In a franchise, two parties enter into an agreement. The agreement enables a franchise to use the brand name of the franchisor and sell its services and products. The franchisee, in return, pays a fee to the franchisor.
Usually, a franchisee sells the products and services by functioning as a branch of the franchisor. It might use franchising rights and sell products under its business venture. The franchisor might grant franchising rights to a single or many firms or individuals. If a single person receives these tights, then he becomes the seller of the products of a franchisor in a specific geographical limit or market.
The franchisor supplies its services, products, brand name, trade secrets, and technological know-how to the franchise. It offers assistance and training in a few cases. The functions are discussed in our Franchising homework help online.
What are the Features of Franchising?
In a franchising agreement, a franchisor gives permission to the franchise for using its intellectual properties such as trademarks and patents.
The franchisee pays a royalty to the franchisor and might have to share a portion of profits. The franchisor on the contrary provides its assistance, goods, and services to the franchise.
Both parties sign an agreement. The agreement contains the terms and conditions that are applicable to both the parties regarding franchise.