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What is the meaning of Franchise? Concept, Definition of Franchise

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Definitions and concepts of franchise

Definition of franchise

The franchise is the practice of using the business model of another person. The franchise is a word of Anglo-French bypass - Franc - is used as a noun or as (verb). The dictionary of the Real Academia Española (twenty-second edition) defines it in its second meaning as a "grant of exploitation rights of a product, activity or business name, given by a company to one or several persons in a given area."
A franchise is an agreement between the "franchisor" or "franchisor" and the recipient or "franchisee" by virtue of which the first yields to the second exploitation of a franchise. There are several important elements that make up the "franchise". On the one hand the trademark which distinguishes the franchisor, a specific "know-how" (or know-how) and the training provided to the franchisees. In exchange for the cession, the franchiser receives a royalty, royalty or canon that can give back the transfer of the trademark, know-how transferred and the rate of training and advice.
The franchise is granted, usually for a specified period and for a specific "territory". An exclusive franchise can be or not exclusive. Various tangible and intangible, such as national or international support services of advertising, training, and others are made available commonly by the franchisor. The agreements usually last between five and thirty years, with the possibility of cancellation or termination early by a notice. Failure to comply with contractual clauses often have serious consequences for franchisees.
The franchise has existed for many centuries, but not rose to fame until the 1930s in the United States, when the establishment of electricity, vehicles and, in the 1950s, the interstate highway system helped boost the establishment of franchises, especially in the franchise based on sale of food or service establishments. According to the International Franchise Association, approximately 4% of all businesses in the United States are franchises.

Franchise concept

The franchise concept is a concept that is used in the business world and that refers to a type of commercial economic activity that the successful model of any company takes and plays it in another region in order to obtain results more or less controllable and already tested. Franchises can be very beneficial but also problematic: while a franchise granted to the entrepreneur name and confidence that is the brand already has without need to start from scratch, a right to use the name of the successful company, you must also pay logically which in some cases can be quite expensive. The franchises are a characteristic element of the phenomenon of globalization because it means that a particular company may be reproduced under the same conditions in various parts of the world.
The franchise is basically take the model of a successful company and use it to get a person started his own business. Thus, the entrepreneur pays right to use a trademark, a name and a path which has own customers, which frees you from having to create around a number of own customers. Moreover, franchises are often performed with companies or brands that have a high level of success and which are recognized large scale by which the entrepreneur began its business with certain benefits. Clear examples of franchises are the chains of fast food like McDonald's, coffee shops like Starbucks or other services such as Blockbuster.
Franchises allow that a company that emerged at a specific point on the planet can be reproduced exactly equal anywhere in the world since the parent company is responsible for generating the same profile, the same space and the same product in all parts of the world, making then that the new entrepreneur have with a product or service reliable and recognized.

Definition of franchise

The franchise term has multiple uses, although it must be said that all the meanings are related. It is, for example, the permission that grants someone the rights to exploit a product, a brand or an activity. This concession can give a company with one or more individuals in a specific area.
To purchase the franchise, the person can exploit it commercially but respecting a number of terms and conditions. In this way, benefiting by having a business that tends to be recognized by consumers. Franchises retained the same quality of products and services in all its branches. McDonald's fast food shop is one of the best-known franchises and guarantees that the customer will have the same type of food at any of its restaurants worldwide.
The franchisor is who gives the franchise to the franchisee. For this, authorizes it to use the license of a brand and its methods of business in exchange for a royalty or a periodic fee.
The NBA teams, for example, are franchises. Unlike clubs that exist in most of the planet, these teams are brands whose owner can sell or move from one city to another. The goal of an NBA franchise, therefore, is to obtain sporting success, but also economic benefits.
On the other hand, a franchise is the exception with which benefits someone avoiding the payment of the corresponding rights to products entering or taking out of the country, or the usufruct of a particular service of public outreach. Also referred to as franchise to the minimum cost of the damage that accepts cover the insurer by signing a contract of insurance.
Keys to choose the best franchise
When you want to start a business or project choosing the name suitable to achieve a good promotion of the same and hence the success in this endeavor, is essential. There are many tips that may be useful for such an action, and here are some of them.
Before beginning must be borne in mind that the investment is a priority when it comes to start a business, but it is also know to look to the future and understand what activity or sector in the market will have a space secured in the commercial world and what brand may have fairly guaranteed success. For this purpose it is essential that the entrepreneur will report in detail and don't be snatching by fashions; to access data from the study of the market is essential to be able to raise a feasible undertaking.
There are many possibilities when choosing a franchise entrepreneur's, and with the economic crisis easing funding towards projects that involve a certainty of success, especially those that are backed by prestigious brands.
In a franchise, the investment is one of the starting points that should be considered and analysed in detail; It must conform to the needs of the entrepreneur, since probably it depends on to carry out their business plans. Anyway, one more common is that provided councils of at least 30% on own resources in order to avoid excessively indebted. On the other hand, business by business does not work; It is necessary to be attracted to the sector in order to collect achievements that go beyond the economic and security inspire consumers.
The entrepreneur must know clearly the peculiarities of the system; for example if mount a store within a string possibilities of getting ahead are greater at the beginning of part of a business already accredited, reducing risks. However it presents disadvantages as the crop of freedom, since certain scheduled rules should be followed at the beginning of the collaboration and the owner of a store has no power to make changes, by appropriate to consider them. Therefore, it is essential to be aware of all the obligations that are acquired, as payment for royalties, the conditions of assistance, forecast results, and everything related to the new venture.
Must choose the brand and the sector is key to begin a hasty step and manifest an irrevocable growth; Surely the strongest sectors are the aesthetics and the restoration. The less desirable are those that can ensure temporary success, as in the case of real estate, which in recent years has fallen into a tailspin.

Franchise concept

A franchise is a branch of a large distributor of goods and services. The franchises are known since antiquity as the concession which gives the owner of a business to a third party in order to distribute and profit from the sale, taking these rights and permissions for the distribution of products or services. This right, not only gets the name of the Distributor, but that the link for upcoming business to be developed.
The owner of the plant or "The franchisor" transfers all your operating systems, technical know-how, marketing systems, training systems, management methods and all relevant information the branch will begin to operate. It also trains the new investor or "Franchisee" and provides training and support throughout the life of the franchise agreement.
The franchisor already with experience in the matter, gives the franchisee the maximum guarantee of profits, it tells you the strategies and best places to place business, its concept must have a high degree of systematization. Franchise should provide opportunities, not generate problems, that is why the owner should create system which makes easier the work of his new partner, thus reflecting experience and security. But as well as the franchisor must ensure that this "comfortable" franchisee must also monitor that branch of your company complies with the agreements.
The word franchise already comes from the middle ages, meaning a privilege or a right. Then, the sovereign or local Lord, gave the right to occupy markets or fairs, or to hunt on their land. Over time the rules governing the franchise became part of the common law of Europe. This format of business is one of the most popular and sustainable of the moment. Large companies have survived the onslaught of the economic crisis thanks to the expansion that is generated from the generation of different distribution points.

Definition of franchise

The word franchise comes from "Frank" barbarian people that occupied France, and enjoyed privileges, as not to pay taxes. Hence franchise refers to concessions or freedoms, especially of payments or taxes, for example the Customs franchises, not paying for the import or export of products.
The franchising or in Castilian franchise, is a strategy that companies use to expand, through laapertura of new premises with your brand in a certain area, but which are depropiedad of other people. This allows them to achieve the aim of positioning in the market without investment (since locals are others) and stay with percentage of the profits from these.
The relationship between the owner of the trademark (called franchisor) and local (called franchisee), commercially independent is stable contractual and collaborative manner. Through this agreement, which in general has a term, the franchisor delivers to the franchisee, the merchandise of your brand, already imposed in the market, thus ensuring a certain prestige, and the image that it resembles that local to all of the rest of the chain, so that they display unified, as if they were branch offices, in exchange for a percentage of sales. You can agree that the sale is in exclusive mode or not. It includes in addition to marking, other commercial designations, designs, signs, models, etc.
They are examples of this business mode, McDonald's, Pizza Hut, Subway, or Havana.
In addition to these commercial franchises, also any services, industrial or distribution.

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