What is a Franchise?

Franchising is simply a method for expanding a business and distributing goods and services through a licensing relationship. In franchising, franchisors (a person or company that grants the license to a third party for the conducting of a business under their marks) not only specify the products and services that will be offered by the franchisees (a person or company who is granted the license to do business under the trademark and trade name by the franchisor), but also provide them with an operating system, brand and support. – Quotation from IFA(INTERNATIONAL FRANCHISE ASSOCIATION)

Above information and related articles may find on Internet. However, there are many kinds of franchises and they have increased day by day, so choosing a Franchise will gradually become more difficult. If you are considering to be Franchisee, then you will be an manager on your business, won’t be a labor. It might be necessary to change your mind.

Also, you have to understand the differences between Franchising, Licensing and Agency.

Franchising

Definition Not only products and services, and provide know-how of management and sales.
Branding Each franchisor takes control of franchisee to promote the brand penetration.
Territory System As the case may be
Handling of other products and services Limited or restricted
The main profit
  • Franchise fee
  • Royalty
  • Gross profit
Continuous support Business management

Licensing

Definition License the use of packaged products and services.
Branding A licensee has discretion except products, services, brand name and unification of design.
Territory System Decide strictly by licenser
Handling of other products and services Qualified by reservations
The main profit
  • License fee
  • Gross profit
Continuous support Optional Service

Agency

Definition Agency channel for the market expansion of products and services.
Branding Only products and services.
Territory System Decide by Manufacturer
Handling of other products and services No regulations
The main profit Gross profit
Continuous support Only products and services

The purpose of this site is that you gather a lot of information so as not to fail by the franchise business.