Franchising is a method of business or type of relationship wherein a franchisor (the provider of content, product, idea, concept, etc) gives a license (exclusive or otherwise) to the franchisee to sell the former’s product...
Coming from an old French word for privilege, freedom or right, the concept of Franchise probably arose in medieval England, when the King would grant a commercial license to sell or do a certain thing. Franchising evolved into a more concrete form in Germany during the 1840s when some breweries granted franchisees to certain taverns giving them exclusive selling rights to their ale. Singer Sewing Machine Company started the system of franchisee agreement which is the mainstay of all franchising relationships today.
Franchising is a method of business or type of relationship wherein a franchisor (the provider of content, product, idea, concept, etc) gives a license (exclusive or otherwise) to the franchisee to sell the former’s product. The franchisee agreement binds both the parties to the relationship through its different terms and conditions. In this relationship the franchisee gets a proven platform, a known trademark and an established business principle; thus, the franchisee does not have to start from establishing his own platform. As long as the brand value of the franchisor is maintained, the relationship remains healthy. However, there are disadvantages. Franchisee relationship is a fetter on the freedom of the franchisee, on experimentation, on variety of products. The goodwill of any franchisee may be lost because of shoddy support from franchisor, or bad customer service from the franchisee.
Worldwide franchising is a huge business, and franchisee trade volume within the USA itself is more than $10 billion. With a failure rate as low as 5.3%, franchising has its charms to entrepreneurs, as well as its many pitfalls. In this section of 01webdirectory.com we provide a glimpse into the world of franchising, and provide various links to many useful resources.