If you want to undertake, today there are various business models that you can investigate to find out which one is right for you. One of them are the franchiseswhich refer to a type of contract that includes a wide range of provision of services, supply of goods, assignment of the trade name or brand, by the franchisorand payment of a percentage of the income and acceptance of the conditions of sale, by the franchisee.
inside this business modelthe franchisor is usually a manufacturer, wholesaler, or service company and the franchisee you are an independent merchant who purchases the right to own and operate one or more units of the franchise system.
In other words, a franchise It consists of an agreement or contract by which a company, called the franchisor, assigns to another, called the franchisee, the right to operate its own system for marketing products or services.
Its main characteristics
According to several authors, including Kotler, there are at least 3 points that can be considered the main characteristics of a franchise:
- The franchisor must own a trademark or service mark that it licenses to its franchisees in return for royalty payments.
- The franchisee You pay for the right to be part of a system.
- The franchisor provides its franchisees with a marketing and operations system to develop the business.
types of franchises
There are various types of franchises according to its structure and operation:
If you want to know in detail what each type of franchise and some examples, we share with you Types of franchises, what are they like and which one is best for you?
Advantages and disadvantages of franchises
Like everything in life, this business model It can present certain advantages and disadvantages, both for the franchisee and for the franchisor. Here we share some:
What do you think of this business model? If you are interested in undertaking under this scheme, it is necessary to have a series of formats to start the process, so we share with you what basic documents you need to open a business. franchise.
With information from the academic article The franchise: a successful commercial formula in full growthby Pedro Cuesta Valiño, published by the Comillas Pontifical University and the University of Alcalá.
Editorial Team The editorial team of EMPRENDEDOR.com, which for more than 27 years has worked to promote entrepreneurship.