Franchising is a marketing concept that a company/entity uses as a strategy for expansion. A franchise is a business opportunity that allows a buyer to start her business using company’s concept, brand, processes, and reputation. In franchising the company is a franchisor, and the buyer is a franchisee.
The franchisor allows the franchisee to use its business model, processes, intellectual property, and expertise to sell its services or products under license. Franchisee pays, in return, certain fees and comply with the franchisor’s policies and procedures. Both franchisor, and franchisee sign a franchise agreement that defines rights and obligations of each party. McDonald’s, Tim Hortons, and subway are a few example of franchise.
If you are an entrepreneur with a booming business, franchising could take your business to the next level. Franchising does not always offer any straight forward guarantees. However, if done right the benefits far outweigh the disadvantages. If you want to throw open your doors and turn your business into a household name, here are 4 smart things you should consider before you pursue.