What Factors Determine a Profitable Franchise?

Franchising is a privilege granted to a person or legal entity by a power authority. According to the International Franchise Association, franchise is a contractual relationship between the franchisor and the licensee. The franchisor provides or is obliged to maintain continuous interest in the areas of the business know-how and training of the licensee ; The licensee's business is carried out under a common label, business model and process owned and controlled by the franchisor, and the licensee invests in its business from its own resources.

Franchise

Franchising refers to individuals or

Franchise

The confirmation of franchise rights mainly solves the problem of what factors are recognized and when. according to

Practice form

The essence of the franchise is the paid transfer of intangible assets. In practice, it mainly has the following forms:

l Ordinary franchise, that is, the head office grants franchise rights to franchisees, and franchisees use these franchise rights to operate;

2. Entrust franchise, that is, the head office sells the franchise to an agent, and the agent is responsible for the concession of a certain area;

3. Develop franchise chain, that is, franchisees purchase the franchise from the head office, and also the franchise to set up several branches in a region. If the future business development, you need to build another branch, you do not need to apply to the head office.

4. Ownership cooperation franchise, that is, the head office and the franchisee jointly hold the branch shares;

5. Distribution franchise. The head office not only grants franchisees franchise rights, but also grants them the right to set up wholesale warehouses to supply and distribute goods to other franchise stores.

In recent years, franchises have been increasingly engaged in chain, joint venture, and cooperative operations. Economically developed countries such as the United States, the United Kingdom, the Netherlands, and Japan all consider franchises as intangible assets. My country

First, it is necessary to know that a franchise opportunity is just another business opportunity. Assessing franchise opportunities still requires common business considerations, which means common sense is still important. However, there are certain differences in franchising that potential investors need to understand. Some differences are briefly described below.

1. Fixed franchise terms. Almost all franchise agreements have a fixed term, usually 10 years. Unless the licensee is severely incapable of fulfilling its obligations, most franchisees will postpone the deadline.

2. Development schedule. When a licensee acquires a specific regional or national or regional concession--often referred to as a regional or general concession--the franchisor typically

Investing in the franchise industry requires that potential licensees have a keen insight and thinking about business opportunities. Before buying a franchise, a possible licensee should have an understanding of the benefits and dangers of the franchise. He must be satisfied with what the franchisor provides and fully understand that even with a variety of precautions, buying a franchise is still risky Yes, although the risk has become smaller. Good franchises may fail, while poor franchises may thrive. Unfortunately there is nothing absolutely certain in this world, even in franchises.

Not all franchises are created equal, and franchise contracts differ. A business that seems certain to succeed may fail due to declining demand, a recession, or poor management of franchisees. Looking at the large number of franchise industries and distinguishing between good and bad is a difficult job in itself. The best tools for finding a successful franchise or avoiding a poorly run franchise are research and knowledge.

Franchise legal relationship- Although the franchisor and the franchisee belong to the same franchise system, there is no subordinate relationship in property rights. As separate

Franchise contract

Economic entities, franchisees and franchisees enjoy independent rights and assume obligations independently. From the perspective of legal relationship, the franchise legal relationship is a civil legal relationship between equal subjects. The rights and obligations of the franchisor and the franchisee are stipulated in the franchise contract. The franchise contract is the foundation and key to the existence and development of the franchise system. It is related to the vital interests of both parties to the franchise, and it is also the fundamental basis for resolving disputes related to franchising.

Ownership of franchise The ownership of franchise is decentralized, but it must form a consistent image of the same capital operation externally. Franchising is a franchise headquarters that licenses its own products, services, trademarks, and business models to franchise stores to operate. Franchise stores need to pay corresponding royalties. Therefore, the main store and franchise stores are not the same capital. Generally speaking, in the franchise chain system, franchise stores have ownership of their own stores, while the management rights are highly concentrated in the franchise headquarters. Franchise headquarters shall provide franchise licenses and related business guidance to franchisees, and franchisees shall pay franchise fees for this.

Franchise contract- The relationship between franchise franchise stores and franchise headquarters is based on the signing of a franchise contract. Through the contract, the main store allows the franchise store to use its own full set of software, and requires the franchise store to operate in accordance with its own model, and has the right to supervise and guide the franchise store. Obligations to provide contractual assistance and services.