franchising
Sign in to saveupright=1.35|thumb|right|A McDonald's franchise in [[Moncton, New Brunswick, Canada]] Franchising is a business practice where a company licenses its business model to another company, or more precisely, where the franchisor licenses some or all of its knowhow, procedures, intellectual property and other rights to sell its branded products and services to a franchisee. In return, the franchisee pays certain fees and agrees to comply with certain obligations, typically set out in a franchise agreement.
AI overview
Franchising is a business arrangement where a company (the franchisor) licenses its business model, brand name, and operating methods to another business (the franchisee), who pays fees in exchange for the right to sell the franchisor's products and services. This matters because it allows businesses to expand rapidly by having independent operators run locations under their brand, while franchisees can start a business using an already-proven model and established brand name.
AI-generated from the Wikipedia summary — may contain errors.
Article
35 sectionsContents
- History
- Fees and contract arrangement
- Example
- Rationale and risk shift
- Advantages and disadvantages of franchising as an entry mode
- Obligations of the parties
- Regulations
- Australia
- New Zealand
- Brazil
- Canada
- China
- India
- Kazakhstan
- Europe
- France
- Italy
- Norway
- Russia
- Spain
- Turkey
- United Kingdom
- United States
- Community Franchising
- Definition
- Example
- Operations
- Social franchises
- Third-party logistics franchising
- Event franchising
- Home-based franchises
- See also
- Further reading
- References
- External links
upright=1.35|thumb|right|A McDonald's franchise in [[Moncton, New Brunswick, Canada]] Franchising is a business practice where a company licenses its business model to another company, or more precisely, where the franchisor licenses some or all of its knowhow, procedures, intellectual property and other rights to sell its branded products and services to a franchisee. In return, the franchisee pays certain fees and agrees to comply with certain obligations, typically set out in a franchise agreement.
The word franchise is of Anglo-French derivation - from , meaning "free" and it is used both as a noun and as a transitive verb. For the franchisor, use of a franchise system is an alternative business growth strategy, compared to expansion through corporate owned outlets or "chain stores". Adopting a franchise system business growth strategy for the sale and distribution of goods and services minimizes the franchisor's capital investment and liability risk.