« Buying a Franchise? Or Starting from Scratch | Negocios | Franchising Business »
What is a franchise or said another way "franchising"
A franchisor launches a successful business model. Typically, as many small businesses grow they face a "GROWING PAIN" question. How do I expand, how do I open my sencond location. The critical question is is somewhere between your cash flow and your ability to manage your time. If you are in the black "Positive" then you have the abiity to easily buildout secondary locations. If you are in the black but don't want to invest "YOUR MONEY", then you can become a franchisor.
A franchisor has developed a successful product or service and a proven format of a business. In turn, you can grant rights for other individuals to sell you service or product. He/She is referred to as a franchisee an independent entreprenuer. You grant via contract the right to your goods or services under your system. You permit the franchisee to use your trademark, name, advertising, and know-how.
So going back to the original "GROWING PAIN "question, How Do I Expand? You now can tailor your time and invest it into supporting the franchisee with guidance in his/her business -> Instead of catering the clients. For this management guidance and assistance, your franchisee pays you a franchise fee and a royalty based on the sales of the operation.
March 10, 2005 11:13 AM