Posts Tagged ‘What is a Franchise’
October 16th, 2009 | 
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Many of the most commonly known or recognized symbols in the world are companies that are operated via a franchise method. Some common examples include McDonald’s, Burger King, and a wide variety of other businesses, everything from hair cutting to gas stations to donuts can be in a franchise.
A franchise is a sort of business structure that creates a right in an individual or in a group of people to market a specific company’s goods or services within a specific territory, location, or geographic location. Some of the most popular franchises across the country are McDonald’s, Subway, Domino’s Pizza, and the UPS Store.
Because so many fast food restaurants operate as franchises, many people think that only fast food businesses can be franchises. This is simply not true as there is a huge range of businesses that operate in the franchise style. There are more than 100 different franchise businesses available in the United States today. These include automotive businesses, cleaning/maintenance, health & fitness (health clubs), financial services, fast food, gas stations, and pet-related franchises.
Anyone considering entering into a franchise system through purchase of a franchise should know exactly how the whole system works, what is expected from your personal franchise, and what fees are involved both long and short term.
For starters, the individual purchasing the franchise and then runs it is called or known as the franchisee. The franchisee buys the franchise from the franchisor. The franchisor is the company or individual that owns the rights associated with the franchise, like symbols, color schemes, etc. Once the purchase is complete, the franchisee must follow the rules of the agreement and any rules established by the franchisor. In addition to the initial purchase price, the franchisee generally has to pay an ongoing franchise royalty fee. In the current business world, franchising has become one of the most popular ways of doing business. In most areas, it is nearly impossible to go more than three blocks without seeing a nationally known or recognized franchise.