What are franchise systems?

The term franchise comes from the French word, which means "freedom". Politically, franchise is freedom to participate in the government, usually through voting law. In business, franchise systems are business models in which a company with a successful product or business system allows other businesses to work right or freedom to work under their business name for a fee. The original enterprise that sells the right is called franchises: a person or company that buys the law is called a franchise. In 1850, the singer Isaac invented his sewing machine, the first such machine suitable for household use. In order to raise money for marketing and production, the singer of the territorial rights of the individuals and businesses that would sell machines and teach the buyers how to use them. This early form of the franchise system allowed its companies to expand to the international market five years later when it opened the plant in Paris, France.

The franchise systems spread rapidly in the middle of the twentieth century. Inspired by the phenomenal success of Ray Kroc and McDonald's Hamburger Chain and exploded franchise opportunities. Fast food, car repairs, dry cleaning, carpet cleaners, family restaurants and travel agencies were just a few of the available options. The growth was so fast that in some cases the franchises were involved in the sale of franchise opportunities that they tend to neglect franchises after signing the contract. In 1979, the Federal Commission (FTC) issued a franchise rule in the United States, which set minimal revelation requirements for franchise sale.

In most franchise systems, franchises maintain great control of the product and services offered by the franchisee to maintain the consistency of the brand and the reputation of its trademark or product. For example, franchises generally have very strict terms regulating marketing, KVProduct alite, building design and operational procedures. The entrepreneur should carefully examine the limitation of potential franchise systems to make sure he is able to work comfortably within these restrictions.

The investor must be aware that the purchase of a franchise from a successful society does not necessarily guarantee its own success. The buyer must make sure that he has the managerial ability needed to operate the company, as well as the abilities needed for the particular franchise he chooses. For example, if he does not have a mechanical ability, he may want to stay away from franchise systems that specialize in automatic repairs or mastery. It should also make sure that the success of the parent company is not the result of regional questions that the company has resources to offer sufficient support and that its local area has not reached a saturated point for this type of business.

In investigating specific franchise systems, potential buyers should consider a number of factors. He should know exactly what isincluded in the franchise fee; For example, training, operating manuals, instructions in the selection of pages and territorial rights. The franchisor should be able to provide projections of how much capital the investor needs, how long it should take for the new franchise to be opened, and when the investor can reasonably expect to get back his initial investment. It is also important to know how many other franchise offices will be sold in the same area and if there are any ongoing franchise fees.