Franchising Basics
Franchising is a dynamic
business arrangement that has become the dominant
force in the distribution of goods and services in
the United States, as well as many other parts of
the world. It has experienced explosive growth
since the 1970’s and is expected to be the leading
method of doing business in the 21st
century.
Franchising is a contractual method for marketing
and distributing the goods and services of a company
(franchisor) through a dedicated network of
distributors (franchisees). Under the terms of the
contract, a franchisor grants the right and license
to franchisees to market a product or service, or
both, using the trademark and/or the business system
developed by the franchisor.
The
franchise relationship imposes obligations on both
parties. The franchisor must provide the product, a
proven marketing plan or business format, marketing
support and training. The franchisee brings
financing, management skills, and a determination to
own and operate a successful business.
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