A franchise is a business organization that uses an established name in order to run its operation. Franchising grew as result of some companies failing a t a very tender age. The concept skips the growth stage at which most of the companies. The owners of such a company do not have to wait for long before reaping their fruits. For a franchise business consulting, a strong brand name is very crucial.
Gaining entry into a very competitive market requires a very large of capital. Using strong brands in order to gain entry is one of the easiest ways of entering such competitive markets. This means that the initial setup costs are reduced. The risks of failure are also reduced. The amount of royalties to be paid is agreed upon by the two parties. Sometimes, the revenues collected also determine the amount to be paid.
The subsidiary organizations operate all the commercial activities under the name of these parent. All the signs, emblems and company logos have to be those of parent firms. The operational costs are incurred by the franchisee. Any further costs that may arise as a result of this contract are settled by the franchisee. The risks of failure are also borne by the franchisee.
Most of the established enterprises across the globe have been in these commercial operations for quite some time. Since they are not good in integrating themselves in the local markets, such businesses may find franchising being a very attractive option. Local agents are picked and these run most of operations in local countries. The cost of running is agreed upon by the two entities. The profits may be split according to an agreed proportion.
Businesses exist in different forms. The franchises also exist in different sizes. Larger franchises include the hotel, transportation companies and insurance firms. These require a very large capital in order to set the foundation. The middle-sized franchises include the fast food chains, insurance agencies and gas stations. These require a relatively smaller amount of capital in order to start the commercial operations.
The franchising operations are usually run for a number of years depending on the agreement between the two organizations. The contract period could be defined within the contract clauses. In special cases, the period is fixed. The agreements between the two organizations also define the length of the operation. Once the period has lapsed, the franchisees have to negotiate new trading terms with the parent companies. This means buying a new commercial license.
Each of the two parties has some obligations. The obligations are specified within the contract clauses. The parent protects the trademark and the brand name by ensuring that the quality of services is maintained. The company concepts and expansion decisions still remains with the patent organization. The parent has to run all the operations under the name of parent company.
The franchise business consulting is bound by different regulations. If a franchise is listed, the stock market regulations have to be adhered to. Some jurisdictions require that all the activities that have taken place during an accounting period be documented. The list of all the franchisees also has to be submitted to the registrar of companies.
Gaining entry into a very competitive market requires a very large of capital. Using strong brands in order to gain entry is one of the easiest ways of entering such competitive markets. This means that the initial setup costs are reduced. The risks of failure are also reduced. The amount of royalties to be paid is agreed upon by the two parties. Sometimes, the revenues collected also determine the amount to be paid.
The subsidiary organizations operate all the commercial activities under the name of these parent. All the signs, emblems and company logos have to be those of parent firms. The operational costs are incurred by the franchisee. Any further costs that may arise as a result of this contract are settled by the franchisee. The risks of failure are also borne by the franchisee.
Most of the established enterprises across the globe have been in these commercial operations for quite some time. Since they are not good in integrating themselves in the local markets, such businesses may find franchising being a very attractive option. Local agents are picked and these run most of operations in local countries. The cost of running is agreed upon by the two entities. The profits may be split according to an agreed proportion.
Businesses exist in different forms. The franchises also exist in different sizes. Larger franchises include the hotel, transportation companies and insurance firms. These require a very large capital in order to set the foundation. The middle-sized franchises include the fast food chains, insurance agencies and gas stations. These require a relatively smaller amount of capital in order to start the commercial operations.
The franchising operations are usually run for a number of years depending on the agreement between the two organizations. The contract period could be defined within the contract clauses. In special cases, the period is fixed. The agreements between the two organizations also define the length of the operation. Once the period has lapsed, the franchisees have to negotiate new trading terms with the parent companies. This means buying a new commercial license.
Each of the two parties has some obligations. The obligations are specified within the contract clauses. The parent protects the trademark and the brand name by ensuring that the quality of services is maintained. The company concepts and expansion decisions still remains with the patent organization. The parent has to run all the operations under the name of parent company.
The franchise business consulting is bound by different regulations. If a franchise is listed, the stock market regulations have to be adhered to. Some jurisdictions require that all the activities that have taken place during an accounting period be documented. The list of all the franchisees also has to be submitted to the registrar of companies.
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