Introduction-
Franchising is a method that includes processes such as distribution of goods and services by the involvement of a person who is referred to as a “franchisor”. A franchisor is a person who establishes and works for the trademark of the brands. The franchisee also develops the business organization system and a franchisee. He pays some initial fee or royalty for doing business. The fee is charged against the right of doing business under the franchisor’s name. A franchisor is a person who develops a franchisee and works and maintains it. The franchise is a contract between two people. Franchising is the set of methods that includes the distribution of goods and services of its brand.
About franchising and its types-
Franchising is a method of marketing as well as distribution. The franchisor is the owner of the franchisee or the business, who permits a group of individuals or an individual the right to do the business by selling its product or selling service by using the franchisor’s business system. There are three different types of franchising relationships. Those are listed below-
- Traditional or product distribution franchising- Traditional or product distribution franchising is least known and identified. Product distribution franchising has a large number of sales. Examples of traditional or product distribution franchising are automotive, gasoline, bottling and some more manufacturing industries.
- Business format franchising- The business format is the most known and identified type of franchising. In the business format of franchising, the franchisor gives the franchisee the entire system for the operation of the business, not just a brand name, goods and services. The franchisee business gets development support, site selection, operating manuals, training, brand standards, quality control, a marketing strategy, and business support from the person referred to as franchisor.
- Manufacturing franchising- Manufacturing franchising is a type of franchising where the franchisor can manufacture their product and can sell them to the customers in the market. The products manufactured have the trademark of their brand.
Franchising is about brands and relationships-
Franchising is more about the franchisor’s brand name as well as brand value. It is mostly about the thing like how the franchisee incurs and faces its obligations as well as about the thing that how the franchisee is operated and managed by the franchisor. Generally, people think it’s a state of fear when operating a franchisee. This is for the straightforward reason that when the purchase of a franchise is made, it needs to comply and follow and obey the strict rules and guidelines provided for operating the business. These rules and guidelines are provided to maintain the growth, stability, and consistency of the business organization. Fees are collected from the franchisee. Apart from all these laws and all these things, franchising is mostly about the relationship between the franchisee and the franchisor.
The brand of the franchisor is the most valuable thing or a valuable asset. The customers, when they are in the market, they decide which business to shop for. They relate the things they know and are interested in knowing which basis the business is about. Mostly the customers are not more worried about the facts like the business is own by whom, as long as their expectations are met or satisfied. It is more preferable to establish a good customer relationship, as it will help in attracting customers. This good relationship will also help in building the trust of customers. The customers must trust the franchisor and other franchisees to rely upon it to meet their expectations.
Franchising and about support and systems-
Franchisors provide tools, systems, and support so that their franchises would do up to the system’s brand standards. And they would also ensure the satisfaction of the customers. While selecting a system of franchise you want to invest in, you should look after and evaluate the types of benefits and support you will be provided and about the thing that how the franchisor is dealing with the evolution of goods and services so that it cope up with the change in the customer expectations and customer demand. A set of common services that the franchisors should provide to the franchisees are-
- A recognized and known name, i.e. brand name.
- Research and development of the new product.
- Training and team for management.
Conclusion-
Becoming a franchisor can be a great opportunity. You can also invest in a franchise. But it is more important to look after everything before investing in it. And you should look after the things before signing in any document or contract or an agreement. Franchising has eliminated the fear of buying one as there are many options available. Before doing and investing, first, you should know briefly about the franchise system and its offering.
