Franchise system – it is composed of an experienced franchisor who pitches his business idea to several franchisees for a fee called the network entry fee.

Franchise system

 
A franchise system is a business model in which a company (called a franchisor) allows a other persons or entities (called franchisee) to use its brand, products and services in a certain geographical area. The franchisor provides support and training to the franchisee and enables the franchisee to use its business system, including its processes, procedures and technologies. Îin return, the franchisee pays an entry fee and an ongoing franchise fee, as well as a portion of its revenue to the franchisor. The franchise system is popular in various industries, such as fast food, retail and courier, and can be an attractive way to start a business with the support and brand of an existing company.
 

Real business opportunities must be based on objective data.

It is necessary to analyze whether there are consumers who are willing to pay for the product or service.

The entrepreneur should have the following qualities:

  1. to be ambitious, to be able to take risks,
  2. to be Flexible,
  3. be persistent with goals, know how to prioritize, be able to make sacrifices for the project,
  4. be willing to fail, have a clear commercial orientation,
  5. to be optimistic and strive to improve,
  6. to have self-confidence, focus on achievements, assume responsibilities and take initiatives.

Becoming an entrepreneur can be much easier if you opt for a franchise formula, because although you need to have many of the characteristics of an entrepreneur, the system will allow you to become an entrepreneur while avoiding a lot of studies and lots of research. because they have already been developed and compared by the franchisor.

The main sectors in which franchise opportunities are present are the following:

  1. Travel Agents, Leisure Preschool Education, Real Estate Agents, Office-Recycling-Consumables, Food, Health, Beauty, Aesthetics, Business Services (such as Translations),
  2. Hospitality-Restoration,
  3. Services for natural persons,
  4. Computers-Telephony Specialized stores, telecommunications, dry cleaners, furniture-accessories, clothing fittings, fashion and accessories, transport and courier, business related to cars and vending machines.

Franchising is a system used for the commercialization of products, services or technology, based on close and continuous collaboration between different and independent legal and financial companies – the franchisor and its individual franchisees.

Franchise know-how is vital and must meet three conditions: secret, substantial and identifiable.

There are different types of franchises: manufacturing, industrial, distribution, service, corner, associative, financial, multi-franchise, regional and master.

The franchisor is an entrepreneur who, as a natural or legal person, owns the overall business concept that he has decided to grant and who, after successfully experimenting with it, uses it to distribute his products or services, giving up his industry or intellectuality. property rights, its know-how, corporate image, work systems, technology and commercial techniques.

Franchisee is an entrepreneur who, as a natural or legal person, has decided to join a franchise network and who accepts the global business concept that his franchisor has conveyed to him, maintaining a close collaboration with him and engaging in a joint project.

This type of licensing must be a partnership that offers both parties certain benefits: through the franchise system, the know-how owner promotes and develops his successful business concept. In turn, franchisees are more likely to succeed than if they were to open their own business from scratch because they are allowed to adopt a tried and tested business idea.

This collaboration will take place for a fixed period of time (for the duration of the contract), during which the parties are independent entities from the point of view it is legal.

A franchising system or network is characterized by certain features, which show similarities, regardless of the field of activity.

The most relevant characteristic of such a system is that the franchisor imposes its own policies, in compliance with the related legislation, through the manual/manuals made available to franchisees, establishing the operating rules of the entire system, defines the corporate or brand identity.

Operational procedures, such as management, personnel policy, marketing, sales and control, are largely determined by the franchisor. Therefore, a standardization of business processes in the franchise system is necessary to guarantee compliance with the registered brand, know-how and preserve the quality already recognized by customers.

Not every business is suitable for franchising, even if it is a successful one, because the business model must be easy to multiply, be able to be easily transmitted and appropriated by people who do not have the skills for that business (in most cases no experience in the field is required, the franchisor conducting specialized training with the staff of his franchisees), not to depend on restrictive factors, such as regional environmental conditions, so that can be easily developed at national or even international level.

The role of the FRANCISOR

The franchisor-franchisee relationship is governed by the provisions of the franchise agreement, which is binding on each of the network members. It regulates the conditions of collaboration, what rights and obligations the contracting parties have, what are the fees and their due dates, the value of the royalties, the territory for which exclusivity is granted, information about auditing the activity, etc.

Îat the same time, the contract contains the specifications for franchisees, which contribute to the standardization of the brand image. This includes marketing and advertising concepts that have already been developed, as well as requirements for staff training, accounting and periodic reporting. Îbefore signing the contract, it is advisable to seek the advice and support of a specialist lawyer and/or accountant who will legally verify all requirements and conditions.