Franchise model of business

Franchise form of business - Use it:allows someone to use your name and trademarkyou are paid a fee of some kind, generally it is an upfront fee plus an ongoing royalty payment such as a percentage of sales or a fee per product soldcan be a more cost effective solution to expand initiallyallows operational control for consistencyprovides an exit strategy for the businesscommon branding and marketing for brand awarenesscommon uses:used for business expansion to grow a business model in wide array of industries including service, food, lodging, retail, professional services, medical, and many othersgreat use for manufacturing and distribution businessesconverting other companies into your franchiseused to help co-brand other existing similar types of businesseslimitations:while you have the ability to enforce operational requirements and consistencies, only the franchisee is able to manage employees. To help co-brand other existing similar types of businesses or in master arrangements where a brand is licensed to a third party in other parts of the world (international master franchise)limitations:the greatest limitation of licensing is its ability for you as the licensor to be able to control operating procedures of the business operation. First, the franchisee must purchase the controlled rights, or trademark, to the franchiser business in the form of an upfront fee; second, the franchiser often receives payment for training, equipment, or business advisory services from the franchisee; and lastly, the franchiser receives ongoing royalties or a percentage of the business' sales. Franchise is a type of license that a party (franchisee) acquires to allow them to have access to a business's (the franchiser) proprietary knowledge, processes and trademarks in order to allow the party to sell a product or provide a service under the business's name.

How Franchising Works: An illustrated guide

An efficient business model blamed by some for low wages, franchising squeezes small-business owners between corporations ...