What is franchising?

Many people have heard the word "franchising". About what franchising is, our article will tell.

Franchising is a form of relationship betweenindividuals and / or firms in which party No. 1, known as the "franchisor" and having a corporate identity system, brand name, known brand, know-how, production and / or trade secrets, experience, knowledge, reputation and other intangible assets, authorizes party number 2, called "franchisee", to use all of the above on certain conditions.

Also, franchising is a method of organizationbusiness. In it, the owner firm (that is, the franchisor) passes the exclusive right to sell the services and goods of this firm to a company or a businessman (that is, a franchisee) in exchange for the obligation of a company or businessman to sell these services and goods:

  • with application of agreed technologies;
  • with observance of specific quality characteristics;
  • by a certain scheme;
  • under a negotiated trademark;
  • in a pre-determined location.

One of the key concepts in such a systemrelationship is a franchise or a franchise package. This is generally considered to be a complete business system, including software, work permits, documentation and other materials that party No. 1 transfers to party # 2. The availability of such a franchise allows the party # 2 to work efficiently, even if it does not have preliminary experience and knowledge in a particular area of ​​business. Now you know what franchising is!

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