The market of franchises It is becoming broader and more diversified. Today there are thousands of varieties of companies and many action models in this field. But, how to choose your type of franchise?
Even when the know-how and the brand continue to be the key factors in establishing a franchise system, while the franchisor and the franchisee are the main actors; At present it is almost impossible to speak of only one type of classification for this business system.
Choose your type of franchise
There are several types of franchises, depending on the classification criteria. Here we will talk about three of the main ones. Take note and choose the one that best suits your conditions as a franchisor or future franchisee:
1. Depending on the level of integration of the integrated network
It takes place between a manufacturer and various retailers. Here, the manufacturer franchisor exclusively and directly distributes its products through a network of franchised retail outlets.
semi-integrated
It occurs between the manufacturer and the wholesaler or between the wholesaler and the retailers. It is the type of franchise that has spread the most in the world and covers the food, textile, car accessories and hardware sectors.
Horizontal
The franchisor is originally one or more wholesalers or one or more retailers who, after the success of their points of sale, are franchised to other points of sale.
Vertical
The franchisor is the own retailer owning a brand that franchises the manufacturer. It usually occurs in haute couture, like Pierre Cardin.
2. According to degree of financial and personal co-participation
Active
Franchisees, as required by the franchisor, are the ones who are directly in charge of managing their establishments.
Financial
The franchisor is only an investor, but is not in charge of managing the franchise, delegating these functions to its managers and employees.
associative
Franchisor and franchisee are associated in some way, such as, for example, that the franchisee owns shares of the franchise, or that the franchisor participates in the capital of the franchised company or vice versa. In this way, they share the financial risks.
3. According to the sector of activity to which the franchisee belongs
Of production
The franchisor is both the manufacturer of the products distributed by the franchisees and the wholesale distributor. The franchisor thus shortens the distribution channel and directly controls the sale of its products.
Of distribution
The franchisor selects products that are manufactured by other companies and distributes them among its franchisees, to whom it provides certain services. Franchisees are responsible for marketing the product. It is used in the food sector as a form of commercial integration between independent retailers and purchasing centers.
of services
Franchisees provide the services developed by the franchisor as their own new and specific formula. It is the one with the greatest diversity, covering all types of services, provided that they have been previously experienced and are original, profitable and easily reproducible. It is the one that generally requires the least initial investment effort, and in which the most important factor is the transmission of Know-How, together with human capital.
Industrial
In this, an industrialist yields to another, in addition to his Know-howmanufacturing law, technology and marketing of its products, its brand, administrative and management procedures, as well as sales techniques.