A franchise is a marketing system based on close and continuous collaboration between companies, although they are legally and financially separate, are bound by a contract.
Under this agreement, and in exchange for a series of economic considerations, the franchiser grants the franchised company the right to exploit a brand, while providing their help to start the business and properly exploit it.
In the wording of the franchise agreement mainly engaged two agents
Brings expertise and experience regarding a closed business concept, tested
• Provides its “know-how” and “know how”.
• Own some legal rights to the trademarks, logos and emblems of the products it sells.
It provides the initial investment needed to start the business and personal effort to steer properly.
• has the right to be responsible for human resources, technical resources and financial obligations to launch the business and ensure its continuity profile.
• Ready to take on the political guidelines that define the franchisor. If what we want is to stay a franchise is best to be well informed of all that exist within the business sector in which we want to move, for it is best to go to specialized magazines franchises and Trade Sector Franchise where you can live compare the advantages and disadvantages of each of the Franchise.
The key business of the franchise: The aspects that characterize the franchise are as follows
1. Assignment of a right
The franchisor allows the franchisee to use the corporate identity of your business: trademarks, trade names, signs, the right granted entitles and requires the franchisee to use the mark or brand of products or services. The brand is one of the fundamental elements of the franchise. In fact, the value of a franchise is proportional to its visibility among consumers.
2. Transfer of “know-how”
This is the set of knowledge and practices relating to the management and operation of your business that transmit the franchisor to the franchisee.
3. Legal independence of the parties
Although they have a common identity, franchisor and franchisee are independent units with their own legal personality.
4. The geographical exclusion
The exclusive area is set by the franchisor and can range from a few blocks to a full autonomous community, depending on the trade policy of the franchisor. It is important to note that these limits should be incorporated into the contract to defend the interests of the franchisee.
5. Permanent assistance from the franchisor
Training should start before starting the implementation of the activity and continue once it starts. The franchisor will have the infrastructure, equipment, facilities and human resources to train their franchisees.
6. Economic considerations
The franchisee pays to the central franchisor an entrance fee or fee, which is payable upon signing the contract and some royalties on sales or purchases you are doing.
7. The obligation to comply with the rules
The franchisee is subject to the type of management of the main business variables imposed by the policy designed by the franchisor, who has warranted and maintaining your own corporate identity. It can cover issues such as product or pricing policy, and even the selection of personnel.